USD/CAD Daily Forecast – U.S. Dollar Tries To Rebound

USD/CAD Video 08.12.20.

U.S. Dollar Is Moving Higher Against Canadian Dollar

USD/CAD continues its attempts to settle above the nearest resistance level at 1.2800 while the U.S. dollar is gaining ground against a broad basket of currencies.

Currently, the U.S. Dollar Index is trying to settle above the resistance at the 91 level. The U.S. Dollar Index has already made several attempts to move above this level but did not manage to gain sufficient upside momentum. If the U.S. Dollar Index settles above 91, it will head towards 91.50 which will be bullish for USD/CAD.

No important economic reports were released in U.S. and Canada today so foreign exchange market traders focused on general market news. Britain began mass vaccination of its citizens but this news failed to provide support to riskier assets. Perhaps, continued problems in Brexit negotiations decreased traders’ risk appetite.

Tommorow, the Bank of Canada will announce its Interest Rate Decision. The interest rate is expected to stay unchanged at 0.25% so traders will focus on the Bank’s commentary. At this point, no major moves are expected but the Bank may share its views on additional ways to support the economy.

Technical Analysis

USD to CAD failed to settle below the support at 1.2775 and is trying to gain upside momentum above the nearest resistance level at 1.2800. If this attempt is successful, USD to CAD will get to the test of the next resistance at 1.2835.

A move above the resistance at 1.2835 will push USD to CAD towards the resistance at 1.2860. In case USD to CAD manages to settle above the resistance at 1.2860, it will head towards the next resistance level at 1.2900.

At this point, resistance levels that are located between 1.2800 and 1.2900 do not look very strong, so USD to CAD may have a good chance to develop upside momentum in case the right catalysts emerge.

On the support side, USD to CAD needs to get below the recent lows at 1.2775 to continue its downside move. In case USD to CAD settles below the support at 1.2775, it will gain downside momentum and quickly get to the test of the support at 1.2750.

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