USD/CAD Daily Forecast – Support At 1.3100 In Sight
USD/CAD Video 03.11.20.
Canadian Dollar Continues To Gain Ground Against U.S. Dollar
USD/CAD is currently trying to settle below the support at 1.3135 as the U.S. dollar continues to lose ground against a broad basket of currencies.
The U.S. Dollar Index is under pressure since the beginning of the day. It has already managed to get below the 50 EMA at 93.60 and is currently testing the next support level at the 20 EMA at 93.45. If the U.S. Dollar Index manages to settle below this level, it will head towards the major support level at 93 which will be bearish for USD/CAD.
Today, all traders will focus on the U.S. presidential election. At this point, the market believes that U.S. lawmakers will reach consensus on the massive coronavirus aid bill after the election, which would be good for stocks and bad for the U.S. dollar.
In addition to expectations of a huge post-election stimulus bill, the Canadian dollar is boosted by the recent oil price strength. Today, oil managed to gain strong upside momentum and tested the resistance at the $38 level, providing support to commodity-related currencies.
USD to CAD managed to gain significant downside momentum and is currently trying to settle below the support at 1.3135. If USD to CAD is able to settle below this level, it will get to another test of the major support level at 1.3100. This level has been tested several times in recent weeks and proved its strength.
In case USD to CAD declines below the support at 1.3100, it will move towards October lows near 1.3080. A move below the support at 1.3080 will open the way to the test of the next support level at 1.3050.
On the upside, a move above 1.3135 will open the way to the resistance level at 1.3200. There are no material levels between 1.3135 and 1.3200 so this move may be fast.
If USD to CAD settles above 1.3200, it will head towards the resistance at the 20 EMA at 1.3220. A move above the 20 EMA will lead to the test of the next resistance at the 50 EMA at 1.3235.
For a look at all of today’s economic events, check out our economic calendar.