USD/CAD Daily Forecast – U.S. Dollar Gains Some Ground In A Volatile Trading Session

USD/CAD Video 21.12.20.

Canadian Dollar Is Trying to Rebound

USD/CAD is currently trying to settle below the support at 1.2860 after testing the resistance at the 50 EMA at 1.2955 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index got a boost amid worries about the new strain of coronavirus. However, the test of the resistance level at 91 was not successful, and the U.S. Dollar Index declined towards 90.30.

Most likely, the American currency failed to continue its upside move on the foreign exchange market because U.S. lawmakers have finally managed to reach consensus on the new $900 billion coronavirus aid package. If the U.S. Dollar Index moves towards the 90 level, USD/CAD will find itself under pressure.

Today, Canada reported that Wholesale Sales increased by 1% month-over-month in November. Meanwhile, the New Housing Price Index increased by 0.6% month-over-month in November. On a year-over-year basis, New Housing Price Index grew by 4.6%.

It should be noted that economic reports may have limited impact on traders’ mood in the upcoming trading sessions as market participants will likely continue to focus on major developments which include Brexit, the new U.S. stimulus package, and the new COVID-19 strain.

Technical Analysis

USD to CAD gained upside momentum but faced resistance at the 50 EMA at 1.2955 and pulled back. Currently, USD to CAD is moving towards the support at the 20 EMA at 1.2830.

If USD to CAD manages to settle below the support at 1.2830, it will move towards the next support level at 1.2800. A move below 1.2800 will open the way to the test of the support at 1.2775.

On the upside, the nearest resistance level for USD to CAD is located at 1.2860. If USD to CAD settles above the resistance at 1.2860, it will head towards the next resistance level at 1.2900. A successful test of the resistance at 1.2900 will push USD to CAD towards the next resistance level at the 50 EMA at 1.2955.

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