USD/CAD Daily Forecast – Weaker Oil Puts Pressure On The Canadian DollarUSD/CAD has managed to get above the nearest resistance level at 1.3235.
USD/CAD Video 14.08.20.
The U.S. Dollar Index is trying to get to the test of the 93 level amid continued uncertainty regarding the fate of the new coronavirus aid package in the U.S.
At this point, no talks have been scheduled, and there is a significant chance that lawmakers will return to negotiations only in September due to August recess.
The U.S. has recently reported that Retail Sales increased by 1.2% month-over-month in July compared to analyst consensus of 1.9%. The retail sales looked better without auto sales, and Retail Sales excluding Autos grew by 1.9% on a month-over-month basis.
Meanwhile, U.S. Industrial Production increased by 3% month-over-month, in line with analyst expectations.
Without any news on the U.S. coronavirus aid package, traders’ focus will likely shift to economic data. In case the upcoming economic reports are disappointing, the U.S. Dollar Index may move below the recent lows at 92.50 which would be bearish for USD/CAD.
For the Canadian dollar, oil price dynamics remain a major catalyst. While WTI oil prices have stalled near $42, oil may continue its upside move in case crude inventories continue to decline.
USD to CAD returned above the nearest resistance level at 1.3235. Currently, USD to CAD has good chances to settle in a range between the new support at 1.3235 and the resistance at 1.3330.
In case USD to CAD manages to get above the resistance level at 1.3330, it will gain upside momentum and head towards the 20 EMA at 1.3350. A move above the 20 EMA will mark the end of the current downside momentum, and USD to CAD will have good chances to move towards the 50 EMA at 1.3465.
On the support side, a move below 1.3235 will open the way to the test of the recent lows at 1.3200. USD to CAD remains in a downside trend so the test of the recent lows may be coming soon even if USD to CAD first settles in a range between 1.3235 and 1.3330.
For a look at all of today’s economic events, check out our economic calendar.