USD/CAD Daily Forecast – Resistance At 1.2800 Stays Strong

USD/CAD Video 18.01.21.

U.S. Dollar Is Gaining Some Ground Against Canadian Dollar

USD/CAD has recently made an attempt to settle above 1.2800 but pulled back closer to the support level at 1.2750 while the U.S. dollar was mostly flat against a broad basket of currencies.

The U.S. Dollar Index tried to settle above the resistance at the 50 EMA at 90.95 but failed to develop sufficient upside momentum and pulled back towards 90.80. The nearest support level for the U.S. Dollar Index is located at 90.70. If the U.S. Dollar Index declines below this level, it will head towards the support at 90.50 which will be bearish for USD/CAD.

Today, Canada reported that Housing Starts declined from 259,900 in November to 228,300 in December. It should be noted that Housing Starts remain at rather high levels so it’s too early to tell whether Canada’s housing market has started to slow down due to the second wave of the virus.

In the upcoming trading sessions, foreign exchange market traders will likely focus on the first moves of the U.S. President-elect Joe Biden. It remains to be seen whether his $1.9 trillion stimulus program will put additional pressure on the American currency.

Technical Analysis

USD to CAD faced strong resistance at 1.2800 and pulled back. Currently, USD to CAD needs to settle back above 1.2775 to have a chance to get to the test of the resistance at 1.2800.

If USD to CAD manages to settle above 1.2800, it will move towards the next resistance level which is located near the 50 EMA at 1.2835. A move above this level will push USD to CAD towards the resistance at 1.2860.

On the support side, the nearest support level for USD to CAD is located at the 20 EMA at 1.2750. If USD to CAD declines below this level, it will head towards the next support level at 1.2720. In case USD to CAD manages to settle below the support at 1.2720, it will get to the test of the next support level which is located at 1.2700.

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