USD/CAD Daily Forecast – Test Of Support At 1.3260

USD/CAD Video 02.11.20.

Canadian Dollar Gains Ground Against U.S. Dollar At The Start Of The Week

USD/CAD failed to settle above the resistance at 1.3330 and declined below 1.3300 while oil managed to gain upside momentum after a sell-off.

WTI oil has recently tried to settle below the $34 level but gained upside momentum and rebounded closer to the $36 level, providing support to commodity-related currencies like the Canadian dollar.

Meanwhile, the U.S. Dollar Index continued to gain ground against a broad basket of currencies ahead of U.S. presidential election. The U.S. Dollar Index settled above the 94 level and made several attempts to get above the next resistance at 94.20. If the U.S. Dollar Index manages to get above the resistance at 94.20, it will gain additional upside momentum which will be bullish for USD/CAD.

Today, the U.S. reported that Manufacturing PMI increased from 53.2 in September to 53.4 in October compared to analyst consensus of 53.3. In Canada, Manufacturing PMI decreased from 56 to 55.5. Numbers above 50 show expansion. Later today, traders’ focus will shift from economic data to the upcoming U.S. presidential election.

Technical Analysis

USD to CAD did not manage to gain additional upside momentum above the resistance at 1.3330 and moved back below 1.3300. Currently, USD to CAD is testing the nearest support level at 1.3260.

In case USD to CAD manages to settle below this level, it will get to the test of the next support at the 50 EMA at 1.3240. The 20 EMA is at the same level so USD to CAD will likely get strong support near 1.3240.

A move below the 20 EMA and the 50 EMA will signal that the recent attempt to move higher has come to an end. In this case, USD to CAD will move towards the support at 1.3200. A move below this support level will open the way to the test of the next support at 1.3135.

On the upside, USD to CAD needs to settle above the resistance at 1.3330 to have a chance to continue its upside move. The next resistance level for USD to CAD has emerged at 1.3370, and it can also face some resistance at the recent highs at 1.3390.

If USD to CAD settles above this level, it will head towards the major resistance level at 1.3420.

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