USD/CAD Daily Forecast – Canadian Dollar Retreats Despite Strong Oil

U.S. Dollar Continues To Move Higher Against Canadian Dollar

USD/CAD has recently made an attempt to settle above the resistance at 1.2730 while the U.S. dollar was mostly flat against a broad basket of currencies.

The U.S. Dollar Index is currently stuck near the resistance level at 96.50. The yearly highs for the U.S. Dollar Index are located at 96.61. In case the U.S. Dollar Index moves above 96.61, it will head towards the resistance at 96.70 which will be bullish for USD/CAD.

Today, U.S. reported that Manufacturing PMI increased from 58.4 in October to 59.1 in November compared to analyst forecast of 58.8. Services PMI declined from 58.7 to 57 while analysts expected that it would grow to 59.

Foreign exchange market traders also focused on the dynamics of commodity markets. WTI oil gained upside momentum after U.S. announced its decision to release 50 million barrels from the Strategic Petroleum Reserve.

It looks that oil traders believe that this amount will not be able to change the supply/demand balance, and WTI oil is currently trying to settle above the 50 EMA at $78.45. In case this attempt is successful, WTI oil will move towards the 20 EMA at $79.75 which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD managed to get above the resistance level at 1.2700 and tried to get above the next resistance at 1.2730. In case USD to CAD settles above 1.2730, it will move towards the next resistance level at 1.2760.

A successful test of the resistance at 1.2760 will open the way to the test of the resistance at 1.2780. If USD to CAD gets above this level, it will move towards the next resistance level at 1.2800.

On the support side, the previous resistance at 1.2700 will serve as the first support level for USD to CAD. In case USD to CAD manages to settle back below this level, it will move towards the support at 1.2675. A move below this level will push USD to CAD towards the next support which is located at 1.2650.

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