USD/CAD Daily Forecast – Test Of Support At 1.2800

USD/CAD Video 29.12.20.

Canadian Dollar Gains Ground Against U.S. Dollar

USD/CAD is currently trying to settle below the support at 1.2800 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index has managed to get below the psychologically important 90 level and is trying to develop additional downside momentum. The next material support for the U.S. Dollar Index is located at the yearly lows at 89.75. If the U.S. Dollar Index gets to the test of this level, USD/CAD will find itself under more pressure.

No important economic reports were scheduled to be released today in the U.S. and Canada so foreign exchange market traders focused on U.S. stimulus news.

The U.S. House of Representatives has successfully approved $2,000 stimulus checks, and the focus shifted to the Republican-controlled Senate which may be reluctant to increase spending.

At this point, stimulus optimism continues to put significant pressure on the American currency. Just several trading sessions are left in 2020, and the U.S. dollar has a decent chance to finish the year at the lows.

Technical Analysis

USD to CAD gained downside momentum and is testing the support level at 1.2800. If this test is successful, USD to CAD will move towards the next support at 1.2775.

In case USD to CAD manages to settle below the support at 1.2775, it will head towards the next support at 1.2750. A move below 1.2750 will open the way to the test of the next support level at 1.2720.

On the upside, USD to CAD needs to stay above 1.2800 to have a chance to develop upside momentum in the near term. The next resistance level for USD to CAD is located at the 20 EMA at 1.2835.

If USD to CAD manages to settle above the 20 EMA, it will move towards the resistance at 1.2860. A move above 1.2860 will open the way to the next resistance level at 1.2900. In case USD to CAD gets above the resistance at 1.2900, it will head towards the next resistance level which is located at the 50 EMA at 1.2930.

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