USD/CAD Daily Forecast – Test Of Resistance At 1.2850

Canadian Dollar Is Losing Ground As WTI Oil Tries To Settle Below $70

USD/CAD is currently trying to settle above the resistance at 1.2850 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 96.50. If the U.S. Dollar Index manages to settle above this level, it will move towards the next resistance at 96.70 which will be bullish for USD/CAD.

Today, foreign exchange market traders focused on Producer Prices report from U.S. The report indicated that Producer Prices increased by 0.8% month-over-month in November compared to analyst consensus of 0.5%. On a year-over-year basis, Producer Prices grew by 9.6% while analysts expected that they would grow by 9.2%.

Producer Prices data is especially important ahead of tomorrow’s Fed Interest Rate Decision. Most likely, the Fed will announce that it will aggressively cut its asset purchase program to deal with high inflation.

Traders also kept an eye on the developments in commodity markets. WTI oil is currently trying to settle back below the $70 level as traders worry that Omicron will have a negative impact on oil demand. In case WTI oil manages to settle below the $70 level, it will gain additional downside momentum which will be bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD managed to settle above the resistance level at 1.2825 and is trying to settle above the next resistance at 1.2850. In case this attempt is successful, USD to CAD will move towards the resistance at 1.2890.

A move above 1.2890 will open the way to the test of the resistance at 1.2915. If USD to CAD moves above this level, it will head towards the resistance at 1.2940.

On the support side, a move below 1.2850 will push USD to CAD back towards 1.2825. In case USD to CAD declines below this level, it will head towards the support at 1.2800. A successful test of this support level will open the way to the test of the next support at 1.2780.

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