USD/CAD Daily Forecast – Test Of Support At 1.2550

U.S. Dollar Is Under Pressure Against Canadian Dollar

USD/CAD is currently trying to get below the support at 1.2550 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the 94 level but failed to develop sufficient upside momentum. As a result, the U.S. Dollar Index remains in the 93.75 – 94 range. In case the U.S. Dollar Index manages to settle below the support at 93.75, it will move towards the 20 EMA near 93.40 which will be bearish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at the final reading of U.S. Services PMI report for September. The report indicated that Services PMI declined from 55.1 in August to 54.9 in September compared to analyst consensus of 54.4.

The yield of 10-year Treasuries managed to get above 1.50% and is currently trying to settle above 1.53%, which is bullish for the American currency.

However, USD/CAD failed to gain upside momentum and found itself under pressure as strong oil provided support to the Canadian dollar. Currently, WTI oil is trying to settle above the $79 level. In case this attempt is successful, it will move towards the $80 level which will be bullish for commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD managed to settle below the support level at 1.2590 and is trying to settle below the next support at 1.2550. In case this attempt is successful, it will move towards the support at 1.2525.

A move below 1.2525 will open the way to the test of the support at 1.2500. If USD to CAD declines below this level, it will move towards the next support level at 1.2475.

On the upside, the previous support at 1.2590 will serve as the first resistance level for USD to CAD. A move above this level will push USD to CAD towards the resistance which is located near the 50 EMA at 1.2625. In case USD to CAD manages to settle above the 50 EMA, it will get to the test of the next resistance at 1.2650.

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