USD/CAD Daily Forecast – Test Of Support At 1.2850

Canadian Dollar Moves Higher Against U.S. Dollar

USD/CAD is currently trying to settle below the support at 1.2850 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the support level at 96.25 and is currently trying to get to the test of the next support at 96. In case the U.S. Dollar Index manages to settle below 96, it will head towards the next support level at 95.75 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at economic data from U.S. The final reading of the third-quarter GDP Growth Rate report indicated that GDP increased by 2.3% quarter-over-quarter compared to analyst consensus which called for growth of 2.1%.

CB Consumer Confidence report indicated that Consumer Confidence improved from 111.9 in November (revised from 109.5) to 115.8 in December compared to analyst consensus of 110.8. The significant improvement in Consumer Confidence is surprising given the recent news on Omicron, and it shows that U.S. economy remains in a good shape.

Technical Analysis

USD to CAD settled below the support level at 1.2890 and is trying to settle below the next support which is located at 1.2850. In case this attempt is successful, USD to CAD will move towards the next support level at 1.2825.

A move below the support at 1.2825 will push USD to CAD towards the support which is located near the 20 EMA at 1.2800. If USD to CAD declines below the 20 EMA, it will head towards the support at 1.2780.

On the upside, the previous support level at 1.2890 will serve as the first resistance level for USD to CAD. In case USD to CAD gets above this level, it will head towards the next resistance at 1.2915. A successful test of the resistance at 1.2915 will push USD to CAD towards the next resistance level which is located at 1.2940.

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