USD/CAD Daily Forecast – Resistance At 1.2955 In Sight

USD/CAD Video 22.12.20.

U.S. Dollar Continues To Gain Ground Against Canadian Dollar

USD/CAD is moving towards the resistance at the 50 EMA at 1.2955 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 90.50 and is moving towards the next resistance level at the 20 EMA at 90.90. If the U.S. Dollar Index gets to the test of the 20 EMA, USD/CAD will get more support.

Today, U.S. reported that third-quarter GDP increased by 33.4% quarter-over-quarter while analysts expected growth of 33.1%. Meanwhile, Existing Home Sales declined by 2.5% month-over-month in November compared to analyst consensus which called for a decline of 1%.

The beginning of today’s trading session was favorable for riskier assets, and the U.S. Dollar Index tested the support at the 90 level. However, it looks like foreign exchange market traders decided to focus on new problems brought by the mutated strain of coronavirus, which is a bullish development for safe-haven assets like the U.S. dollar.

Technical Analysis

USD to CAD managed to get above the resistance at 1.2900 and is moving towards the next resistance level which is located at the 50 EMA at 1.2955. This resistance level has already been tested during the previous trading session and proved its strength.

If USD to CAD settles above the 50 EMA, it will gain additional upside momentum and head towards the next resistance at 1.3000. Despite the strength of the recent upside move, RSI remains in the moderate territory so there is plenty of room to gain momentum in case the right catalysts emerge. If USD to CAD gets above the resistance at 1.3000, it will move towards the next resistance level at 1.3025.

On the support side, the previous resistance at 1.2900 will serve as the first support for USD to CAD. If USD to CAD declines below this level, it will head towards the next support at 1.2860. A move below this level will open the way to the test of the support at the 20 EMA at 1.2840. In case USD to CAD declines below the 20 EMA, it will head towards the support at 1.2800.

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