USD/CAD Daily Forecast – Support At 1.3280 Stays Strong

USD/CAD Video 02.10.20.

U.S. Dollar Gains Some Ground Against The Canadian Dollar Ahead Of The Weekend

USD/CAD is trying to settle above 1.3300 as the U.S. dollar is gaining some ground against a broad basket of currencies while oil is under pressure as traders worry about the impact of the second wave of coronavirus.

The U.S. Dollar Index has recently made an attempt to settle above the nearest resistance level at the 50 EMA at 93.90 but failed to gain sufficient upside momentum and returned to the previous range between the 20 EMA at 93.65 and the 50 EMA.

If the U.S. Dollar Index manages to settle above the 50 EMA, it will gain upside momentum which will be bullish for USD/CAD.

Today, all markets focused on the news that U.S. President Donald Trump tested positive for COVID-19. The ultimate impact on the currency markets was minimal, and the U.S. dollar gained a bit of ground after swinging back and forth against a broad basket of currencies.

In addition to coronavirus-related news, traders had a chance to evaluate U.S. Non Farm Payrolls and Unemployment Rate reports for September. Non Farm Payrolls report showed that U.S. economy added 661,000 jobs which was a disappointment since analysts expected that 850,000 jobs were created.

Unemployment Rate fell from 8.4% in August to 7.9% while analysts projected that it would decline to 8.2%. The U.S. employment reports pointed to continued recovery of the job market but some traders may have started to worry about potential layoffs in some industries in the fourth quarter.

Technical Analysis

USD to CAD failed to settle below the nearest support level at the 50 EMA at 1.3280 and rebounded back above 1.3300. The nearest resistance level for USD to CAD is located at 1.3330.

If USD to CAD manages to settle above this resistance level, it will gain upside momentum and head to the major resistance at 1.3420. A move above this level will lead to a test of the next resistance at 1.3450.

On the support side, a move below the 50 EMA will push USD to CAD to the next support at 1.3235. If USD to CAD gets below this support level, it will head towards the major support level at 1.3200.

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