USD/CAD Daily Forecast – Weak Oil Puts Serious Pressure On Canadian DollarUSD/CAD gained strong upside momentum and managed to get above 1.3200.
USD/CAD Video 26.10.20.
U.S. Dollar Gains Ground Against Canadian Dollar At The Beginning Of The Week
USD/CAD has managed to get back above 1.3200 as the U.S. dollar is gaining ground against a broad basket of currencies while WTI oil is falling towards the $38 level, putting pressure on commodity currencies like the Canadian dollar.
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The U.S. Dollar Index has climbed above the 93 level and is trying to develop additional downside momentum. The nearest resistance level for the U.S. Dollar Index is located at the 20 EMA at 93.30. If the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.
Today, U.S. reported that New Home Sales declined by 3.5% month-over-month in September. Analysts expected that New Home Sales would increase by 2.8%. The report was very surprising as the housing segment was showing strength in recent months.
Interestingly, the disappointing New Home Sales report provided additional support to the American currency which benefited from safe-haven buying.
This week, USD/CAD traders will focus on Bank of Canada Interest Rate Decision which will be published on Wednesday. While the interest rate is expected to stay intact at 0.25%, traders will pay attention to the commentary which may include promises of additional easing in order to support the economy.
USD to CAD managed to settle above the resistance level at 1.3200 and is testing the next resistance at the 50 EMA at 1.3225. If USD to CAD settles above the 50 EMA, it will move towards the next resistance level at 1.3260.
The resistance at 1.3260 is set to be a major obstacle on the way up for USD to CAD as the previous attempt to establish an upside trend was stopped at this level earlier in October.
If USD to CAD settles above 1.3260, it will move towards the next resistance at 1.3330.
On the support side, USD to CAD will likely get some support at the previous resistance level at 1.3200. A move below 1.3200 will push USD to CAD towards the 20 EMA at 1.3185.
A move below the 20 EMA will signal that USD to CAD has lost upside momentum. In this case, USD to CAD will head towards the support at 1.3135.
For a look at all of today’s economic events, check out our economic calendar.