USD/CAD Daily Forecast – Support At 1.3330 In Sight
USD/CAD Video 04.08.20.
Canadian Dollar Gains Ground As Stronger Oil Provides Additional Support To Commodity-Related Currencies
USD/CAD declined towards 1.3350 as the U.S. dollar remained flat against a broad basket of currencies while WTI oil managed to settle above the $41 level.
U.S. Dollar Index has declined towards 93.5 after another attempt to develop more upside momentum and get above the nearest resistance at 94.
Traders await news on coronavirus aid negotiations between Republicans and Democrats. At this point, it looks like the U.S. dollar may find it hard to move higher without clarity on the stimulus front.
Meanwhile, WTI oil is gaining ground, providing support to commodity-related currencies including the Canadian dollar. As a result, USD/CAD finds itself under pressure and moves towards the nearest support level at 1.3330.
Tomorrow, the U.S. will provide ADP Employment Change report which is expected to show that private employment has increased by 1.5 million in July.
ADP Employment Change report will be the first one in a series of employment reports which are due to be published from Wednesday to Friday.
These reports may have a significant impact on the currency market as they will show whether the current problems on the coronavirus front have put additional pressure on the U.S. job market.
Technical Analysis
USD to CAD continues to trade in a range between the support level at 1.3330 and the resistance level at the 20 EMA at 1.3440.
Currently, USD to CAD has declined closer to the low end of the current trading range and has good chances to test the support at 1.3330.
This support level has already been tested several times and proved its strength so USD to CAD will need significant downside catalysts to move below 1.3330.
If this happens, USD to CAD will gain downside momentum and could quickly find itself at the next support level at 1.3270.
On the upside, USD to CAD will have to get above the resistance at the 20 EMA to have a chance to develop upside momentum. In this case, it will head towards the major resistance level at 1.3500.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
