USD/CAD Daily Forecast – U.S. Dollar Gives Back Early Gains

USD/CAD Video 04.11.20.

Canadian Dollar Is Mostly Flat Against U.S. Dollar

USD/CAD is trading near the support level at 1.3135 after trading close to 1.3300 as the currency market remains highly volatile amid U.S. election uncertainty.

The U.S. Dollar Index is currently located near 93.50 after testing the support at 93.30 and the resistance at 94.30. The nearest resistance level for the U.S. Dollar Index is located at the 50 EMA at 93.60, and a move above this level will be bullish for USD/CAD.

Today, the U.S. provided ADP Employment Change report for October which indicated that private businesses hired 365,000 workers compared to analyst consensus of 650,000.

The report was much worse than expected but the negative developments on the job front will have to be confirmed by Initial Jobless Claims and Continuing Jobless Claims reports, which will be published on Thursday, as well as Non Farm Payrolls and Unemployment Rate reports, which will be published on Friday.

Meanwhile, the U.S. Services PMI report indicated that Services PMI increased from 54.6 in September to 56.9 in October compared to analyst consensus of 56. The services segment continued its strong rebound despite virus-related worries which is a good sign for the U.S. economy.

Technical Analysis

USD to CAD is currently trying to settle below the support at 1.3135 in continuation of a major pullback from the recent highs at 1.3300.

If USD to CAD settles below the support at 1.3135, it will have another chance to test the major support level at 1.3100. A move below the support at 1.3100 will push USD to CAD towards the next support level at October lows at 1.3080. If USD to CAD declines below October lows, it will head towards the support at 1.3050.

On the upside, USD to CAD must settle above 1.3135 to develop upside momentum. In this case, the nearest resistance will be located at 1.3200. The 20 EMA is in the nearby, so this resistance level may be a strong obstacle on the way up for USD to CAD. If USD to CAD manages to get above this level, it will head towards the resistance at the 50 EMA at 1.3225.

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