USD/CAD Daily Forecast – Support At 1.2700 Stays Strong

USD/CAD Video 17.12.20.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD has recently made another attempt to settle below the support at 1.2700 while the U.S. dollar remained under serious pressure on the foreign exchange market.

The U.S. Dollar Index managed to get below the psychologically important support level at 90 and continued its downside move. If the U.S. Dollar Index gains additional downside momentum, it will head towards the next support at 89.40 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims increased from 862,000 (revised from 853,000) to 885,000 while Continuing Jobless Claims declined from 5.78 million (revised from 5.76 million) to 5.51 million.

The second wave of the virus puts pressure on the U.S. job market so the U.S.  economy clearly needs another round of stimulus. According to recent reports, U.S. lawmakers are making progress in negotiations but talks may drag into the weekend.

In Canada, ADP Employment Change report showed that private businesses added 40,800 jobs in November while analysts expected that the economy would lose 50,000 jobs. Canadian dollar is also supported by stronger oil which continues to gain ground despite near-term challenges on the demand front.

Technical Analysis

USD to CAD is currently trying to settle below the support at 1.2720. If this attempt is successful, USD to CAD will get to another test of the support level at 1.2700. This support level has already been tested several times during recent trading sessions and proved its strength.

In case USD to CAD manages to settle below the support at 1.2700, it will gain downside momentum and head towards the next support level at 1.2675. A move below 1.2675 will open the way to the test of the next support at 1.2630.

On the upside, USD to CAD needs to settle above 1.2720 to have a chance to develop upside momentum. The next resistance level for USD to CAD is located at 1.2750. If USD to CAD settles above this level, it will head towards the major resistance level at 1.2775.

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