USD/CAD Daily Forecast – U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD Video 12.11.20.

Canadian Dollar Remains Under Serious Pressure

USD/CAD continues its upside move and is trying to settle above 1.3100 while the U.S. dollar is losing ground against a broad basket of currencies.

Oil is currently trying to get back above the $42 level which should provide some support to commodity-related currencies. However, it looks like the previous upside move of the Canadian dollar was too fast, and traders unwind their bullish bets on the Canadian currency.

Today, the U.S. Dollar Index made an attempt to settle above the resistance at the 20 EMA at 93.15 but failed to gain sufficient momentum and declined below the 93 level. If the U.S. Dollar Index moves towards the support at 92.60, USD/CAD will face some pressure.

Today, U.S. reported that Initial Jobless Claims declined to 709,000 while Continuing Jobless Claims dropped to 6.79 million. Both reports were better than analyst estimates.

At the same time, U.S. inflation was below analyst expectations. Inflation Rate increased by 1.2% year-over-year in October compared to analyst consensus which called for growth of 1.3%. Core Inflation Rate grew by 1.6% compared to analyst consensus of 1.8%.

Technical Analysis

USD to CAD gained strong upside momentum and is currently trying to settle above the resistance level at 1.3100. During the current trading session, USD to CAD tested the next resistance at the 20 EMA at 1.3135.

In case USD to CAD manages to settle above the 20 EMA, it will gain additional upside momentum and head towards the next resistance level at the 50 EMA at 1.3185.

A move above the 50 EMA will signal that USD to CAD is ready to continue its rebound and will make another attempt to establish a new upside trend. In this case, USD to CAD will quickly get to the test of the next resistance at 1.3200.

On the support side, USD to CAD needs to get below 1.3100 to develop downside momentum. The nearest support level is located at 1.3080. If USD to CAD declines below this level, it will head towards the support at 1.3050. A move below this level will open the way to the test of the next support at 1.3000.

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