USD/CAD Daily Forecast – Test Of Resistance At 1.2650

U.S. Dollar Moves Higher Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance level at 1.2650 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to get to the test of the resistance at 93.10 but failed to develop sufficient upside momentum and pulled back below the 93 level. The nearest support for the U.S. Dollar Index is located at the 20 EMA at 92.85. In case the U.S. Dollar Index declines below this support level, it will gain downside momentum and head towards the 50 EMA at 92.40 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims increased from 349,000 (revised from 348,000) to 353,000 compared to analyst consensus of 350,000. Continuing Jobless Claims declined from 2.87 million (revised from 2.82 million) to 2.86 million.

While foreign exchange market traders waited for first material news from the Jackson Hole Symposium, they focused on the dynamics of commodity markets. WTI oil pulled back from recent highs as traders took some profits off the table, and this move put some pressure on commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD managed to get above the 20 EMA at 1.2625 and is testing the next resistance level at 1.2650. In case this test is successful, USD to CAD will head towards the next resistance which is located at 1.2685.

A successful test of the resistance at 1.2685 will open the way to the test of the resistance at 1.2710. If USD to CAD settles above this level, it will move towards the resistance at 1.2730.

On the support side, the previous resistance level at the 20 EMA at 1.2625 will serve as the first support level for USD to CAD. A move below the 20 EMA will push USD to CAD back towards the support level which is located near the recent lows at 1.2590. If USD to CAD declines below 1.2590, it will head towards the next support at 1.2550.

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