USD/CAD Daily Forecast – Test Of Resistance At 1.2860

USD/CAD Video 28.12.20.

U.S. Dollar Is Trying To Gain Ground Against Canadian Dollar At The Start Of The Week

USD/CAD is testing the resistance at 1.2860 while the U.S. dollar is losing ground against a broad basket of currencies.

Today, the U.S. Dollar Index made an attempt to get below the support at the 90 level but failed to gain sufficient downside momentum and rebounded closer to 90.30.

The nearest resistance level for the U.S. Dollar Index is located at 90.50. If the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at which is located at the 20 EMA at 90.70 which will be bullish for USD/CAD.

There are no important economic reports scheduled to be released in U.S. and Canada today so foreign exchange market traders focus on the latest developments on the stimulus front.

U.S. President Donald Trump has signed the new coronavirus aid package on Sunday so the economy will soon get the necessary support.

Interestingly, stimulus news provided support to the stock market but did not provide enough support to riskier currencies, and the U.S. Dollar Index is currently trying to gain some upside momentum.

Technical Analysis

USD to CAD is currently trying to get above the nearest resistance level at 1.2860. If this attempt is successful, USD to CAD will gain additional upside momentum and move towards the next resistance level which is located at 1.2900.

RSI is in the moderate territory so there is plenty of room to gain momentum in case the right catalysts emerge. If USD to CAD manages to settle above the resistance at 1.2900, it will head towards the resistance at the 50 EMA at 1.2935.

On the support side, the nearest support level for USD to CAD is located at the 20 EMA at 1.2840. The next support has emerged near 1.2815. This support level has already been tested several times during recent trading sessions and proved its strength.

In case USD to CAD declines below this level, it will head towards the support at 1.2800. A move below 1.2800 will open the way to the test of the next support level at 1.2775.

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