USD/CAD Daily Forecast – Test Of Resistance At 1.2700

USD/CAD Video 06.01.21.

Canadian Dollar Is Losing Ground Against U.S. Dollar

USD/CAD is trying to settle above the resistance at 1.2700 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently reached a new low at 89.21 but lost downside momentum and rebounded towards the resistance at 89.75. If the U.S. Dollar Index settles above this resistance level, it will move towards the resistance at the 90 level which will be bullish for USD/CAD.

Today, U.S. provided ADP Employment Change report for December which showed that private businesses fired 123,000 workers. Analysts expected that businesses would create 88,000 jobs so the report was very disappointing.

Foreign exchange market traders also had a chance to take a look at the final reading of the U.S. Services PMI report for December. This report was also worse than expected as Services PMI declined from 58.4 in November to 54.8 in December compared to analyst consensus of 55.3.

The ADP Employment Change report and the Services PMI report showed that the second wave of the virus has started to put material pressure on the economy.

Technical Analysis

USD to CAD made an attempt to get to the test of the support level at 1.2625 but lost downside momentum and rebounded closer to the resistance at 1.2700. If USD to CAD manages to settle above the resistance at 1.2700, it will have another chance to test the next resistance level at 1.2720.

In case USD to CAD gets above 1.2720, it will move towards the next resistance level at 1.2750. A successful test of this level will push USD to CAD towards the next resistance level at 1.2775.

On the support side, the nearest support level for USD to CAD is currently located at 1.2665. USD to CAD has already managed to get below 1.2665 during the current trading session but was not able to settle below this level. If USD to CAD moves below the support at 1.2665, it will head towards the next support level which is located near the recent lows at 1.2625.

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