USD/CAD Daily Forecast – Canadian Dollar Retreats As Oil Falls On Virus Worries

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2915 while U.S. dollar is moving lower against a broad basket of currencies.

The U.S. Dollar Index is currently moving towards the support level at 96.25. In case the U.S. Dollar Index manages to settle below this level, it will head towards the next support at 96 which will be bearish for USD/CAD.

There are no important economic reports scheduled to be released today in the U.S. and Canada so foreign exchange market traders are focused on the dynamics of commodity markets.

WTI oil found itself under significant pressure after the Netherlands introduced a strict lockdown. The market is worried that other European countries may follow Netherlands’ example, so traders rush out of riskier assets. This is bearish for commodities and commodity-related currencies. Currently, WTI oil is trying to settle below the $66 level. In case this attempt is successful, it will move towards the psychologically important $65 level which will be bearish for Canadian dollar.

Technical Analysis

USD to CAD managed to settle above the resistance at 1.2915 and is trying to settle above the next resistance level at 1.2940. In case this attempt is successful, USD to CAD will move towards the next resistance level which is located at 1.2970. RSI is close to the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.

If USD to CAD manages to settle above the resistance at 1.2970, it will head towards the next resistance level at 1.3015. A successful test of this level will open the way to the test of the resistance at 1.3050.

On the support side, the previous resistance at 1.2915 will serve as the first support level for USD to CAD. In case USD to CAD declines below 1.2915, it will head towards the support at 1.2890. A successful test of this level will push USD to CAD towards the support level at 1.2850.

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