USD/CAD Daily Forecast – Strong Oil Provides Support To Canadian Dollar

U.S. Dollar Tries To Rebound After Sell-Off

USD/CAD has recently made an attempt to settle below the support level at 1.2590 but lost momentum and rebounded towards the resistance at 1.2650 while the U.S. dollar moved higher against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the 50 EMA at 92.45 and rebounded closer to the resistance at the 20 EMA at 92.60. In case the U.S. Dollar Index manages to settle above the 20 EMA, it will gain upside momentum and head towards the next resistance level at 92.80 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at the latest Producer Prices report from U.S. The report indicated that Producer Prices increased by 0.7% month-over-month in August compared to analyst consensus of 0.6%.

In Canada, traders focused on employment data for August. Employment Change report showed that Canada’s economy added 90,200 jobs in August compared to analyst consensus of 95,000. Unemployment Rate declined from 7.5% in July to 7.1% in August compared to analyst consensus of 7.3%.

Meanwhile, WTI oil made an attempt to settle above the $70 level which provided support to commodity-related currencies like Canadian dollar. A move above this level will push WTI oil towards the next significant resistance level at $72.50 which will be bullish for Canadian dollar.

Technical Analysis

USD to CAD received support near 1.2590 and is trying to move above the resistance level at 1.2650.

In case this attempt is successful, it will head towards the resistance which is located at 1.2685. A move above this level will push USD to CAD towards the resistance at 1.2710.

On the support side, the nearest support level for USD to CAD is located at 1.2625. In case USD to CAD declines below this level, it will move towards the support at the 20 EMA at 1.2615.

A move below the 20 EMA will open the way to the test of the support at 1.2590. In case USD to CAD settles below this level, it will head towards the next support at the 50 EMA at 1.2570.

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