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Vladimir Zernov
USD/CAD

USD/CAD Video 07.08.20.

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Canadian Dollar Loses Ground Amid Weaker Oil Prices

USD/CAD continues to rebound as WTI oil loses ground while the U.S. dollar rebounds against a broad basket of currencies.

The U.S. Dollar Index has managed to get above the 93 level and is trying to settle above 93.50 after the release of better-than-expected U.S. employment reports.

U.S. Non Farm Payrolls report indicated that 1.76 million jobs were added in July while Unemployment Rate declined from 11.1% in June to 10.2% in July.

In Canada, Employment Change report showed that 418,500 jobs were created in July compared to analyst consensus of 400,000. Unemployment Rate declined from 12.3% in June to 10.9% in July.

While the reports were better than analysts expected, they also showed that the pace of job gains has slowed down significantly. The continued problems on the coronavirus front put pressure on businesses and hurt job growth.

In the U.S., Republicans and Democrats continue their attempts to reach consensus on the new coronavirus aid package.

The U.S. President Donald Trump has evaluated the possibility of issuing executive orders in case the current talks bring no deal.

At this point, little progress has been made as Democrats and Republicans remain far apart on what they are ready to spend in the next round of economic stimulus.

Technical Analysis

USD to CAD has managed to settle above the resistance at 1.3330 and continued its rebound.

The nearest resistance for USD to CAD is located at the 20 EMA at 1.3410. USD to CAD has already been close to this level during today’s trading session but failed to gain enough upside momentum to get to the test of the 20 EMA.

In case USD to CAD manages to get above the 20 EMA, it will likely gain additional upside momentum and head towards the major resistance level at 1.3500.

On the support side, the previous resistance at 1.3330 will likely serve as the first support level for USD to CAD.

A move below this support level will open the way to the test of the recent lows at 1.3235.

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

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