USD/CAD Daily Forecast – Test Of Support At 1.2530

U.S. Dollar Remains Under Pressure Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2530 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the support level at 92.15 and is trying to get to the test of the next support at 91.90. In case this attempt is successful, USD/CAD will find itself under more pressure.

Today, U.S. released Non Farm Payrolls report which indicated that U.S. economy added 235,000 jobs in August compared to analyst consensus of 750,000. The U.S. dollar declined against a broad basket of currencies after the release of this report, but the sell-off was not strong. Unemployment Rate report met analyst expectations as Unemployment Rate declined from 5.4% in July to 5.2% in August.

Meanwhile, WTI oil made another attempt to settle above the psychologically important $70 level but lost momentum and pulled back towards $69.50. If WTI oil manages to settle below this level, it will move towards the $69 level which will be bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD managed to settle below the 50 EMA at 1.2550 and is trying to settle below the next support level which is located at 1.2530. In case USD to CAD manages to settle below this level, it will get to another test of the next support at 1.2500.

A successful test of the support at 1.2500 will push USD to CAD towards the next support level at 1.2480. If USD to CAD declines below this level, it will head towards the support at 1.2450.

On the upside, the previous support level at the 50 EMA at 1.2550 will serve as the first resistance level for USD to CAD. In case USD to CAD manages to get back above this level, it will move towards the resistance at 1.2590. A move above 1.2590 will open the way to the test of the next resistance which is located at the 20 EMA near 1.2610.

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