USD/CAD Daily Forecast – Test Of Resistance At 1.3250

USD/CAD Video 15.10.20.

Canadian Dollar Is Under Significant Pressure Against U.S. Dollar

USD/CAD is currently testing the resistance at the 50 EMA at 1.3250 as the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is also testing the resistance at the 50 EMA at 93.75 amid fears about the second wave of lockdowns in Europe. If the U.S. Dollar Index manages to settle above the 50 EMA, it will gain additional upside momentum and move towards the 94 level which will be bullish for USD/CAD.

Today, the U.S. reported that Initial Jobless Claims increased from 845,000 (revised from 840,000) to 898,000. Continuing Jobless Claims declined from 11.18 million (revised from 10.98 million) to 10.02 million.

The situation in the U.S. job market remains tense, and the economy needs another round of stimulus. U.S. Republicans and Democrats continue their negotiations but it remains to be seen whether they will be able to reach a deal before the November election.

Meanwhile, Canada provided ADP Employment Change report for September. The report indicated that Canada’s private businesses cut 241,000 jobs while analysts expected that only 50,000 jobs would be eliminated. The pace of layoffs has increased compared to the previous month.

In combination with virus fears, disappointing job data boosted demand for safe haven assets and put pressure on the riskier currency of Canada.

Technical Analysis

 

USD to CAD gained strong upside momentum and is testing the resistance at the 50 EMA at 1.3250. In case USD to CAD manages to settle above this level, it will head towards the next major resistance level at 1.3330. There are no significant levels between 1.3250 and 1.3330 so this move may be fast.

If USD to CAD is able to get above the resistance at 1.3330, it will gain additional upside momentum and head towards the resistance level at 1.3420.

On the support side, the nearest support for USD to CAD is located at the 20 EMA at 1.3220. If USD to CAD declines below this level, it will head towards the next support level at 1.3200.

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