USD/CAD Video 10.08.20.
Stronger Oil Provides Support To Canadian Dollar
The U.S. Dollar Index continues its attempts to settle above 93.50 amid indications that U.S. lawmakers may soon reach consensus on the new coronavirus aid package.
U.S. Treasury Secretary Steven Mnuchin has recently said that negotiators could reach a deal this week.
Meanwhile, U.S. President Donald Trump has stated that U.S House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer wanted to meet him to discuss the coronavirus aid package deal.
The U.S. economy clearly needs more stimulus so there is a big chance that Republicans and Democrats will ultimately reach consensus on the new coronavirus aid bill. In case the market likes the deal, the U.S. dollar may get some additional support.
Today, the Canadian dollar is supported by stronger oil after the world’s leading producer Saudi Aramco has indicated that oil demand continued to rebound. In absence of economic news in U.S. and Canada and a flat U.S. Dollar Index, oil price dynamics became the main catalyst for USD/CAD in today’s trading session.
USD to CAD faced resistance at the 20 EMA at 1.3400 and declined closer to the nearest support level at 1.3330.
This support level has been previously tested many times, and USD to CAD managed to get below 1.3330 but failed to gain more downside momentum and returned back above this level.
In case USD to CAD manages to settle below 1.3330, it will likely head towards the recent lows at 1.3235.
On the upside, the nearest significant resistance level for USD to CAD is located at the 20 EMA at 1.3400. A move above this level will allow USD to CAD to move towards the major resistance level at 1.3500.
The 50 EMA has finally declined to 1.3500 so this resistance level is set to be very strong. In addition, USD to CAD may face some resistance near 1.3450.
Despite the recent rebound, USD to CAD stays in the downside trend, and the U.S. dollar will need strong upside catalysts to gain more ground against the Canadian dollar.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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