USD/CAD Daily Forecast – Test Of Support At 1.2475
U.S. Dollar Is Losing Ground Against Canadian Dollar
USD/CAD is currently trying to settle below the support level at 1.2475 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index has recently made an attempt to settle below the 94 level but failed to develop sufficient downside momentum. In case the U.S. Dollar Index gets below this level, it will head towards the support at 93.75 which will be bearish for USD/CAD.
Today, U.S. released Non Farm Payrolls report which showed that the U.S. economy created 194,000 jobs in September. Analysts expected that the economy would add 500,000 jobs. The report fell short of analyst estimates and put pressure on the American currency, although it should be noted that this pressure was moderate.
Meanwhile, Canadian dollar received strong support as WTI oil tested the $80 level. WTI oil has not traded at such levels since 2014. In case WTI oil manages to settle above the $80 level, it will gain additional upside momentum which will be bullish for commodity-related currencies, including Canadian dollar.
USD to CAD managed to get below the support level at 1.2500 and is testing the next support which is located at 1.2475. In case this test is successful, USD to CAD will head towards the support level at the recent lows at 1.2450. RSI remains in the moderate territory, and there is enough room to develop additional downside momentum in case the right catalysts emerge.
If USD to CAD declines below 1.2450, it will move towards the next support level at 1.2425. A successful test of this level will open the way to the test of the support at 1.2400.
On the upside, the previous support at 1.2500 will serve as the first resistance level for USD to CAD. In case USD to CAD settles above this level, it will move towards the next resistance at 1.2520. A move above 1.2520 will push USD to CAD towards the resistance at 1.2550.
For a look at all of today’s economic events, check out our economic calendar.