USD/CAD Daily Forecast – Support At 1.2665 Stays Strong

USD/CAD Video 11.02.21.

U.S. Dollar Is Mostly Flat Against Canadian Dollar

USD/CAD made another attempt to settle below the support level at 1.2665 while the U.S. dollar remained flat against a broad basket of currencies.

The U.S. Dollar Index tried to get below the support at 90.30 but failed to develop sufficient downside momentum. The nearest resistance level for the U.S. Dollar Index is located at 90.50. If the U.S. Dollar Index gets above this level, it will head towards the next resistance at the 20 EMA at 90.65 which will be bullish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims decreased from 812,000 (revised from 779,000) to 793,000. Meanwhile, Continuing Jobless Claims declined from 4.69 million (revised from 4.59 million) to 4.55 million. The reports had little impact on the foreign exchange market, and trading in major currency pairs remained mostly calm.

Tomorrow, traders will likely focus on U.S. Consumer Confidence data for February. Analysts expect that Consumer Confidence increased from 79 in January to 80.8 in February. It remains to be seen whether Consumer Confidence will continue to rebound without a new round of economic stimulus as the economy remains far from full employment.

Technical Analysis

USD to CAD has recently tried to settle below the nearest support level at 1.2665 but failed to develop sufficient downside momentum and rebounded closer to 1.2700. The support level at 1.2700 has already been tested several times and proved its strength.

If USD to CAD declines below the support at 1.2665, it will gain additional downside momentum and head towards the next support level at 1.2625. RSI remains in the moderate territory, and there is plenty of room to gain more momentum in case the right catalysts emerge.

If USD to CAD settles below the support at 1.2625, it will move towards the next support at the yearly lows at 1.2590.

On the upside, the nearest resistance level for USD to CAD is located at 1.2700. If USD to CAD gets above this level, it will move towards the next resistance at 1.2720. A successful test of the resistance at 1.2720 will open the way to the test of the resistance at the 20 EMA at 1.2750.

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