USD/CAD Daily Forecast – Test Of Resistance At 1.2835

USD/CAD Video 01.02.21.

U.S. Dollar Gains Ground Against Canadian Dollar At The Beginning Of The Week

USD/CAD is currently testing the resistance at 1.2835 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get above the resistance level at the 50 EMA at 90.80 and is moving towards the next resistance level at 91.10. If the U.S. Dollar Index gets to the test of the resistance at 91.10, USD/CAD will gain additional upside momentum.

Today, the U.S. reported that Manufacturing PMI increased from 57.1 in December to 59.2 in January compared to analyst consensus of 59.1. In Canada, Manufacturing PMI declined from 57.9 to 54.4 compared to analyst forecast of 57.

Foreign exchange market traders will also keep an eye on Biden’s upcoming talks with 10 Republican senators who have presented an alternative package worth $600 billion. Biden’s coronavirus aid package proposal is worth $1.9 trillion, and it remains to be seen whether Republicans and Democrats will be able to reach any consensus or Democrats will try to push the bill without any support from the other party.

Technical Analysis

USD to CAD managed to settle above the 50 EMA at 1.2800 and is trying to get above the next resistance level at 1.2835. If this attempt is successful, USD to CAD will move towards the next resistance at 1.2860.

A successful test of the resistance at 1.2860 will push USD to CAD towards the next resistance at 1.2880. This resistance level has already been tested several times in recent trading sessions and proved its strength.

A move above 1.2880 will open the way to the next resistance level at 1.2915 although USD to CAD may also face some resistance near 1.2900.

On the support side, the previous resistance at the 50 EMA at 1.2800 will serve as the first support level for USD to CAD. If USD to CAD declines below this level, it will head towards the next support at 1.2775. A move below this support level will push USD to CAD towards the next support which is located at the 20 EMA at 1.2760.

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