USD/CAD Daily Forecast – U.S. Dollar Failed To Move Higher

USD/CAD Video 13.01.21.

Canadian Dollar Is Mostly Flat Against U.S. Dollar

USD/CAD  is currently testing the nearest support level at 1.2720 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get back above the 20 EMA at 90.20 and is trying to develop additional upside momentum. The next resistance level for the U.S. Dollar Index is located at 90.50. If the U.S. Dollar Index gets to the test of this level, USD/CAD may get additional support.

Today, U.S. reported inflation numbers that were mostly in line with analyst estimates. Inflation Rate increased by 1.4% year-over-year in December while Core Inflation Rate grew by 1.6%.

Currently, Democrats are trying to impeach the U.S. President Donald Trump for the second time, but it should be noted that the foreign exchange market has mostly ignored the recent developments on the U.S. political front.

Oil is swinging between gains and losses today so the Canadian dollar is left without additional support. At the same time, USD/CAD remains mostly flat despite the dollar’s strength against a broad basket of currencies.

Technical Analysis

USD to CAD is currently trying to settle below the nearest support level at 1.2720. If this attempt is successful, USD to CAD will get to the test of the next support at 1.2700. RSI is in the moderate territory so there is plenty of room to gain downside momentum in case the right catalysts emerge.

In case USD to CAD manages to get below the support at 1.2700, it will move towards the next support level at 1.2665. A successful test of this level will push USD to CAD towards the support which is located near January lows at 1.2625.

On the upside, the nearest material resistance level for USD to CAD is located near the 20 EMA at 1.2750. If USD to CAD settles above this level, it will head towards the next resistance at 1.2775. A move above this level will open the way to the test of the resistance at 1.2800.

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