USD/CAD Daily Forecast – Resistance At The 50 EMA In Sight

USD/CAD Video 13.11.20.

Canadian Dollar Continues To Lose Ground Against U.S. Dollar Ahead Of The Weekend

USD/CAD continues to move higher in continuation of its rebound from the recent lows at 1.2930.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has failed to get above the major resistance level at the 20 EMA at 93.10 and declined towards the support at 92.80.

A move below this support level will push the U.S. Dollar Index towards the next support at 92.60 which may put some pressure on USD/CAD.

Oil’s pullback contributed to Canadian dollar’s weakness today as WTI oil made an attempt to get to the test of the psychologically important $40 level.

Today, U.S. reported that Producer Prices increased by 0.3% on a month-over-month-basis. Core PPI increased by just 0.1% month-over-month. There are no signs of real strength on the pricing front so the U.S. Fed has plenty of work to do to push inflation above the 2% level.

Meanwhile, the preliminary reading of the Michigan Consumer Sentiment report indicated that Consumer Sentiment declined from 81.8 in October to 77 in November compared to analyst consensus of 82. Current problems on the coronavirus front have started to hurt Consumer Sentiment which is a worrisome development for the economy.

Technical Analysis

USD to CAD has managed to get above the 20 EMA at 1.3135 and is moving towards the next resistance level at the 50 EMA at 1.3185. RSI is still in the moderate territory despite the strength of the current rebound so there is plenty of room to gain additional momentum if the right catalysts emerge.

In case USD to CAD gets above this level, it will test the next resistance at 1.3200. A move above the resistance at 1.3200 will open the way to the test of the resistance at 1.3235.

On the support side, the nearest support level for USD to CAD is located at the 20 EMA at 1.3135. A move below the 20 EMA will push USD to CAD towards the next support at 1.3100. If USD to CAD settles below this level, it will get to the test of the support at 1.3080.

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