USD/CAD Daily Forecast – Canadian Dollar Remains Under Pressure As WTI Oil Moves Towards $79

U.S. Dollar Stays Strong Against Canadian Dollar

USD/CAD is currently trying to settle above the resistance at 1.2590 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently made another attempt to settle back above the resistance at 96 but failed to develop sufficient upside momentum and pulled back. In case the U.S. Dolar Index gets above 96, it will head towards the next resistance level at the recent highs at 96.25 which will be bullish for USD/CAD.

Today, foreign exchange market traders had a chance to take a look at inflation data from Canada. Inflation Rate increased by 0.7% month-over-month in October, in line with the analyst consensus. On a year-over-year basis, Inflation Rate grew by 4.7%. Core Inflation Rate increased by 3.8% year-over-year.

Canada’s inflation reports met analyst estimates which is bearish for the Canadian dollar. Meanwhile, WTI oil moved towards the $79 level on fears about the spread of coronavirus in Europe, putting pressure on commodity-related currencies, including Canadian dollar.

Technical Analysis

USD to CAD is currently testing the resistance level at 1.2590. In case USD to CAD manages to settle above this level, it will head towards the next resistance which is located at 1.2625.

A move above the resistance at 1.2625 will push USD to CAD towards the next resistance level at 1.2650. If USD to CAD moves above this level, it will head towards the resistance at 1.2675. A successful test of this level will open the way to the test of the resistance at 1.2700.

On the support side, the nearest support level for USD to CAD is located at 1.2550. In case USD to CAD manages to settle back below the support at 1.2550, it will move towards the next support level which is located at 1.2530. A successful test of this level will push USD to CAD towards the 50 EMA near 1.2500.

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