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

USD/CAD Video 23.11.20.

U.S. Dollar Gains Ground Against Canadian Dollar At The Beginning Of The Week

USD/CAD has recently tried to settle above the key resistance level at the 20 EMA at 1.3115 while the U.S. dollar gained upside momentum against a broad basket of currencies.

The U.S. Dollar Index was under pressure at the start of the day and tried to settle below the support at 92.10. However, the situation has changed after the U.S. provided flash PMI data for November.

Manufacturing PMI increased from 53.4 in October to 56.7 in November while analysts expected that it would decline to 53. Meanwhile, Services PMI grew from 56.9 to 57.7 compared to analyst consensus of 55.

The strength of the services segment was especially surprising as coronavirus surged in the U.S. in November.

The positive economic data provided a major boost to the American currency, and the U.S. Dollar Index made an attempt to settle above the resistance at the 20 EMA at 92.80.

It looks like too many traders were shorting the dollar on the foreign exchange market, and they rushed to exits after the release of PMI reports. If the U.S. Dollar Index gets above the resistance at 92.80, it will gain additional upside momentum and head towards the 50 EMA at 93.20 which will be bullish for USD/CAD.

Technical Analysis

USD to CAD made another attempt to settle above the resistance at the 20 EMA at 1.3115 but did not manage to gain sufficient upside momentum. The resistance at the 20 EMA remains a true wall on the way up for USD to CAD.

If USD to CAD manages to settle above this level, it will gain upside momentum and move towards the 50 EMA at 1.3160. In case USD to CAD gets above the resistance at the 50 EMA, it will continue its upside move and head towards the next resistance level at 1.3200.

On the support side, the nearest significant support level for USD to CAD is located at 1.3080. If USD to CAD declines below this level, it will move towards the next support at 1.3050.

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