USD/CAD Daily Forecast – Resistance At 1.3400 In Sight

Vladimir Zernov
·2 min read

USD/CAD Video 23.09.20.

U.S. Dollar Gains More Upside Momentum

USD/CAD managed to get above the resistance level at 1.3330 and continues its upside move as the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to move above the minor resistance level at 94.20. If this attempt is successful, U.S. Dollar Index will continue its upside move and head to the next resistance at 94.65 which will be bullish for USD/CAD.

Today, U.S. provided flash readings of Manufacturing PMI and Services PMI reports for September. Manufacturing PMI increased from 53.1 in August to 53.5 in September while analysts expected that it would stay flat at 53.1.

Services PMI decreased from 55 to 54.6 as the continued problems on the coronavirus front put some pressure on the services sector. However, the situation in the U.S. services segment is much better than in Europe. Euro Area Services PMI declined from 50.5 in August to 47.6 in July. Numbers below 50 show contraction.

Currently, the U.S. economy is showing relative strength compared to other developed economies,providing additional support to the U.S. dollar.

In this situation, higher oil prices failed to provide material support to Canadian dollar which remains under pressure against the U.S. dollar.

Technical Analysis

USD to CAD gained additional upside momentum above the resistance at 1.3330 and is heading towards the next resistance level at 1.3400.

RSI is still in the moderate territory so USD to CAD has plenty of room to develop momentum if the U.S. Dollar Index continues its upside move.

In case USD to CAD manages to settle above the resistance at 1.3400, it will head towards the next resistance level at 1.3450.

On the support side, the previous resistance at 1.3330 will likely serve as the first support level for USD to CAD.

A move below this resistance level will open the way to the test of the next support at 1.3290. If USD to CAD gets below the support at 1.3290, it will move towards the 50 EMA at 1.3255.

A successful test of the 50 EMA level will open the way to the test of the 20 EMA level at 1.3210.

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

This article was originally posted on FX Empire