USD/CAD Daily Forecast – U.S. Dollar Moves Higher After Strong Retail Sales Report
Canadian Dollar Declines Against U.S. Dollar
USD/CAD is currently trying to settle above the strong resistance level at 1.2685 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index managed to get above the resistance level at 92.80 and is trying to develop additional upside momentum. In case this attempt is successful, the U.S. Dollar Index will move towards the next resistance at 93.10 which will be bullish for USD/CAD.
Today, U.S. reported that Retail Sales grew by 0.7% month-over-month in August while analysts expected that they would decline by 0.8%. Initial Jobless Claims increased from 312,000 to 330,000, while Continuing Jobless Claims declined from 2.85 million to 2.67 million. Better-than-expected Retail Sales and Continuing Jobless Claims reports provided support to U.S. dollar as positive economic data increases chances that Fed will announce the reduction of its asset purchase program on September 22.
In Canada, foreign exchange market traders had a chance to take a look at ADP Employment Change report for August which showed that economy added 39,400 jobs compared to analyst consensus of 180,000.
USD to CAD continues its attempts to settle above the resistance level at 1.2685. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
If USD to CAD manages to settle above 1.2685, it will get to the test of the next resistance level at 1.2710. A successful test of the resistance at 1.2710 will open the way to the test of the resistance at 1.2730. In case USD to CAD settles above 1.2730, it will head towards the next resistance at 1.2760.
On the support side, the nearest support level for USD to CAD is located at 1.2650. A move below this level will lead to a test of the 20 EMA at 1.2640. In case USD to CAD declines below the 20 EMA, it will head towards the next support level which is located at 1.2625.
For a look at all of today’s economic events, check out our economic calendar.