USD/CAD Daily Forecast – U.S. Dollar Fails To Develop Upside MomentumUSD/CAD failed to settle above the 20 EMA and moved back into the previous trading range.
USD/CAD Video 08.07.20.
Canadian Dollar Stays Strong As WTI Oil Continues To Trade Above The $40 Level
USD/CAD tried to get above the 20 EMA at 1.3590 but this attempt was not successful and it returned back into the trading range between the support level at 1.3500 and the 20 EMA.
There were no important economic reports scheduled to be released today so USD/CAD dynamics mostly depended on general risk sentiment and oil price movements.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, declined to the 96.5 level. The downside move of the U.S. Dollar Index is bearish for USD/CAD.
Oil was mostly flat despite the surprising increase in crude inventories and did not provide additional support to the Canadian dollar.
Tomorrow, the U.S. will release Initial Jobless Claims and Continuing Jobless Claims reports. The Initial Jobless Claims report is expected to show that 1.4 million Americans filed for unemployment benefits in a week. Continuing Jobless Claims are expected to dip below 19 million.
These reports could have a material impact on markets since they will show whether the recent problems on the coronavirus front have impacted the job market.
USD/CAD continues to trade below the 20 EMA as recent attempts to gain upside momentum were not successful.
The nearest support level for USD/CAD is still located at 1.3500. A move below this level will lead to increased downside momentum and take USD/CAD to the next support level at 1.3440.
On the upside, the 20 EMA remains the first important resistance level for USD/CAD. This level has already been tested several times and proved its strength.
If USD/CAD manages to get above the 20 EMA, it will be able to gain upside momentum and head towards the 50 EMA at 1.3670.
From a big picture point of view, USD/CAD is in an interesting situation as it is stuck between the resistance at the 20 EMA and the support at 1.3500 and fails to develop momentum.
A move below the support at 1.3500 will initiate a new downside trend, while a move above the 20 EMA will be a significant bullish catalyst for USD/CAD.
For a look at all of today’s economic events, check out our economic calendar.