USD/CAD Daily Forecast – U.S. Dollar Is Losing Some Ground Against Canadian Dollar

Canadian Dollar Gains Ground Against U.S. Dollar

USD/CAD is currently trying to settle below the support at 1.2825 while U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is stuck in the range between the support at 96 and the resistance at 96.25. If the U.S. Dollar Index gets above 96.25, it will move towards the next resistance level at 96.50 which will be bullish for USD/CAD.

Today, foreign exchange market traders are focused on the economic data from U.S. Initial Jobless Claims report indicated that 205,000 Americans filed for unemployment benefits in a week, in line with the analyst consensus.  Continuing Jobless Claims decreased from 1.87 million to 1.86 million compared to analyst consensus of 1.82 million.

Personal Income grew by 0.4% month-over-month in November while Personal Spending grew by 0.6%. Both reports met analyst estimates. Durable Goods Orders grew by 2.5% month-over-month in November while analysts expected that they would increase by 1.6%.

New Home Sales increased by 12.4% month-over-month in November compared to analyst forecast which called for growth of just 3.4%. The final reading of Michigan Consumer Sentiment report showed that Consumer Sentiment improved from 67.4 in November to 70.6 in December compared to analyst consensus of 70.4.

The reports indicated that U.S. economy remained in a good shape. However, the U.S. dollar was mostly flat against a broad basket of currencies as traders were not ready to make big moves ahead of Christmas.

Technical Analysis

USD to CAD settled below the support level at 1.2850 and is trying to settle below the next support level at 1.2825. A successful test of this level will push USD to CAD towards the support which is located near the 20 EMA at 1.2800.

A move below the 20 EMA will open the way to the test of the support at 1.2780. If USD to CAD declines below this level, it will move towards the next support level at 1.2760.

On the upside, the previous support at 1.2850 will serve as the first resistance level for USD to CAD. If USD to CAD settles back above this level, it will head towards the resistance level at 1.2890. A move above 1.2890 will push USD to CAD towards the resistance at 1.2915.

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