USD/CAD Daily Forecast – Test Of Resistance At 1.2800

USD/CAD Video 07.12.20.

U.S. Dollar Tries To Rebound Against Canadian Dollar

USD/CAD is trying to settle above 1.2800 while the U.S. dollar is gaining some ground against a broad basket of currencies.

Earlier, the U.S. Dollar Index made an attempt to settle above the 91 level but failed to develop sufficient upside momentum and pulled back closer to 90.75. If the U.S. Dollar Index gets to the test of the nearest support level at 90.50, USD to CAD will find itself under pressure.

Today, traders focused on the new increase in U.S. – China tensions and U.S. stimulus negotiations. Brexit news also impacted the mood on the foreign exchange market.

At this point, the American currency remains under significant longer-term pressure as traders prefer riskier assets. The recent fast rebounds of the U.S. Dollar Index are not surprising as shorting the dollar is a crowded trade, but these rebounds are quickly followed by strong sell-offs.

As a result, the U.S. Dollar Index managed to get from the 93 level to 90.50 without any material rebound which lasted for more than a few hours. If this trend continues, USD to CAD will soon get to the test of yearly lows.

Technical Analysis

USD to CAD has recently made an attempt to gain upside momentum but faced resistance near 1.2835. Currently, USD to CAD is trying to stay above 1.2800. If this attempt is successful, USD to CAD will get to another test of the resistance at 1.2835.

If USD to CAD manages to settle above this level, it will head towards the next resistance level at 1.2860. A successful test of this level will push USD to CAD towards the resistance at 1.2900.

On the support side, a move below 1.2800 will push USD to CAD towards the recent lows at 1.2775. If USD to CAD declines below this level, it will head towards the next support at 1.2750. A successful test of the support at 1.2750 will open the way to the support level at 1.2720.

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