USD/CAD Daily Forecast – Canadian Dollar Shows Strength Against U.S. Dollar

USD/CAD Video 30.09.20.

Test Of Support At 1.3330

USD/CAD is testing the nearest support level at 1.3330 as the U.S dollar is losing ground against a broad basket of currencies while WTI oil is moving higher after the release of encouraging inventory report.

Earlier, the U.S. Dollar Index made an attempt to settle above the resistance at 94.20. However, it lost upside momentum after the release of U.S. ADP Employment Change report which indicated that private businesses hired 749,000 workers in September.

The report was better than the analyst consensus which called for ADP Employment Change of 650,000, and traders increased their purchases of riskier assets, putting the American currency under pressure.

Recently, the U.S. dollar regained its status of a safe haven asset of last resort and showed strength at times of increased market volatility, outperforming other safe haven assets like gold or Japanese yen.

It remains to be seen whether the U.S. dollar will manage to hold on to this status in the longer term.

For now, the markets are happy about positive developments on the U.S. job front and indications that Republicans and Democrats will ultimately reach consensus on the new coronavirus aid package deal.

If this optimism prevails, the American currency may find itself under additional pressure, which would be bearish for USD/CAD.

Technical Analysis

USD to CAD is currently trying to settle below the nearest support level at 1.3330. RSI is in the moderate territory so there is plenty of room to gain downside momentum if the U.S. dollar continues to lose ground against a broad basket of currencies.

In case USD to CAD gets below 1.3330, it will head towards the next significant support level at the 50 EMA at 1.3280. A move below the 50 EMA will open the way to the test of the next support level at 1.3235.

On the upside, USD to CAD faced very strong resistance at 1.3420. This level has already been tested many times, and each attempt to settle above 1.3420 yielded no results.

If USD to CAD is able to settle above this resistance level, it will gain additional upside momentum and head towards the next resistance at 1.3450.

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