USD/CAD Daily Forecast – Test Of Support At 1.3235USD/CAD made an attempt to settle below the nearest support level at 1.3235 but this attempt was not successful.
USD/CAD Video 12.08.20.
The U.S. Dollar Index has settled below 93.50 amid continued uncertainty regarding the fate of the new U.S. coronavirus aid package.
U.S. Treasury Secretary Steven Mnuchin has indicated that Republicans and Democrats may fail to reach a deal. This will be an unpleasant scenario for the U.S. economy which heavily depends on consumer activity.
Analysts expected that Inflation Rate would increase by 0.8% while Core Inflation Rate would increase by 1.1%.
The significant increase in U.S. inflation is a potential major catalyst for the markets. In case inflation reports in the next few months confirm the trend, traders may start thinking about their assumptions of permanently low rates.
The U.S. debt market has already reacted to the new data, and yields on U.S. government bonds are increasing.
At this point, the increase in U.S. government bond yields did not provide support to the U.S. dollar but the situation may quickly change in case yields continue to rise.
USD to CAD made an attempt to settle below the nearest support level at 1.3235 but this attempt was not successful. However, USD to CAD has decent chances to get below this level in case oil continues to rise or U.S. dollar loses more ground against a broad basket of currencies.
In this case, USD to CAD will gain more downside momentum and head towards the next support level at 1.3200.
On the upside, the nearest resistance level for USD to CAD is located at 1.3330. This resistance level has been tested during today’s trading session, and USD to CAD failed to settle above it.
In case the next test of this resistance level is more successful, USD to CAD will head towards the 20 EMA at 1.3380.
For a look at all of today’s economic events, check out our economic calendar.