USD/CAD Daily Forecast – Strong Inflation Reports Provide Support To U.S. Dollar

USD/CAD Video 11.09.20.

Canadian Dollar Remains Mostly Flat Against The U.S. Dollar Ahead Of The Weekend

USD/CAD is trying to settle above 1.3200 as the U.S. dollar is flat against a broad basket of currencies while oil is gaining some ground ahead of the weekend.

The U.S. Dollar Index has managed to stay above the 20 EMA at 93.10 and is trying to gain more upside momentum. The nearest resistance for the U.S. Dollar Index is located at 93.50, and a move above this level will be bullish for USD/CAD.

Today, the U.S. provided inflation data for August. Both Inflation Rate and Core Inflation Rate were stronger than analyst expectations which is rather bullish for the U.S. dollar.

However, it remains to be seen whether the recent inflation data will be able to provide significant support to the American currency as the Fed has adopted an average inflation target of 2% and is set to let inflation run above 2% for months before taking any serious action.

Technical Analysis

USD to CAD has managed to settle above the 20 EMA at 1.3160 and is trying to get above 1.3200. If this attempt is successful, USD to CAD will head towards the nearest resistance level at 1.3235.

Most likely, USD to CAD will face significant resistance at 1.3235 as it has recently made two attempts to settle above this level, and both attempts yielded no results.

A move above 1.3235 will provide USD to CAD with an opportunity to get to the test of the next resistance level at the 50 EMA at 1.3265. If USD to CAD manages to settle above 1.3265, it will head towards the next resistance at 1.3330.

On the support side, the nearest support level for USD to CAD is located at the 20 EMA at 1.3160. This is a very important level for USD to CAD as a move below the 20 EMA will signal that USD to CAD has lost upside momentum.

If this happens, USD to CAD will head to the next material support level at 1.3135. A move below 1.3135 will open the way to the test of the next support level at 1.3050.

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