USD/CAD Daily Forecast – Canadian Dollar Rebounds After Two-Day Sell-Off

Canadian Dollar Gains Some Ground Against U.S. Dollar

USD/CAD is currently trying to get to the test of the support level at 1.2915 while U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get back above 96.50 and is trying to gain additional upside momentum. In case this attempt is successful, the U.S. Dollar Index will get to another test of the resistance at 96.70 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at Retail Sales report from Canada. The report indicated that Retail Sales increased by 1.6% month-over-month in October compared to analyst consensus which called for growth of 1%.

Traders also continued to monitor the developments in commodity markets as the recent sell-off in the oil market put significant pressure on Canadian dollar. Today, WTI oil managed to get back above the $70 level which provided support to commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is currently trading in a range between the support at 1.2915 and the resistance at 1.2940.

If USD to CAD declines below the support at 1.2915, it will head towards the next support level which is located at 1.2890. RSI is located near the overbought territory, so there is plenty of room to gain downside momentum in case the right catalysts emerge. A move below the support level at 1.2890 will push USD to CAD towards the next support level at 1.2850.

On the upside, USD to CAD needs to settle above 1.2940 to have a chance to gain upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2970.

In case USD to CAD gets above 1.2970, it will move towards the resistance level at 1.3015. A move above this level will push USD to CAD towards the next resistance at 1.3050.

For a look at all of today’s economic events, check out our economic calendar.