USD/CAD Daily Forecast – U.S. Dollar Attempts To Rebound At The End Of The Year

USD/CAD Video 31.12.20.

U.S. Dollar Is Mostly Flat Against Canadian Dollar

USD/CAD made an attempt to settle below the support at 1.2720 but rebounded closer to 1.2750 as the U.S. dollar started to rebound against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the support which has emerged at 89.55 and gained upside momentum. Currently, the U.S. Dollar Index is trying to get to the test of the 90 level.

At this point, it looks like some foreign exchange market traders decided to cover their short positions in the U.S. dollar at the end of the very successful year for those who bet against the American currency. If the U.S. Dollar Index gets above the resistance level at 90, it will move towards the next resistance at 90.15 which will be bullish for USD/CAD.

Today, U.S. released Initial Jobless Claims and Continuing Jobless Claims reports. The Initial Jobless Claims report indicated that 787,000 Americans filed for unemployment benefits in a week. Analysts expected Initial Jobless Claims of 833,000.

Meanwhile, Continuing Jobless Claims declined from 5.32 million (revised from 5.34 million) to 5.22 million. It looks like the situation in the job market has started to improve after a sudden increase in Initial Jobless Claims at the beginning of December.

Technical Analysis

USD to CAD is currently trying to get back above 1.2750 as the U.S. dollar gained some upside momentum against a broad basket of currencies. If USD to CAD manages to settle above 1.2750, it will head towards the resistance level at 1.2775.

A successful test of this level will push USD to CAD towards the next resistance at 1.2800. If USD to CAD gets above this level, it will move towards the resistance which is located at the 20 EMA at 1.2820.

On the support side, the support at 1.2720 has been tested during the current trading session and proved its strength. If USD to CAD declines below this level, it will get to the test of the next support at 1.2700.

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