USD/CAD Daily Forecast – Test Of Resistance At 1.3330
USD/CAD Video 22.09.20.
U.S. Dollar Attempts To Gain More Upside Momentum
USD/CAD continues its attempts to settle above the nearest resistance level at 1.3330 as the U.S. Dollar Index is trying to get above the 94 level.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has managed to move above the 50 EMA at 93.80 after U.S. released a strong Existing Home Sales report.
Existing Home Sales grew from 5.86 million in July to 6 million in August, fully in line with analyst consensus. This is the highest level since Decmeber 2006. It looks like the unprecedented monetary stimulus from the U.S. Federal Reserve is providing significant support to the housing market which is good for the health of the economy.
Meanwhile, oil managed to stay near the $40 level and provided some support to commodity-related currencies including the Canadian dollar.
Tomorrow, traders will focus on flash readings of U.S. Manufacturing PMI and Services PMI reports. Manufacturing PMI is expected to stay flat at 53.1 while Services PMI is projected to decline from 55 in August to 54.7 in September. If PMI reports are better than analyst projections, the U.S. dollar may get an additional boost which will be bullish for USD/CAD.
Technical Analysis
USD to CAD is currently trying to settle above the nearest resistance level at 1.3330. If this attempt is successful, USD to CAD will gain more upside momentum and head towards the next resistance level at 1.3400.
If USD to CAD manages to settle above the resistance at 1.3400, it will move towards the next major resistance level at 1.3450.
On the support side, the nearest support level for USD to CAD is located at the 50 EMA at 1.3250. A move below this level will open the way to the test of the next support level at the 20 EMA at 1.3200.
From a big pciture point of view, USD to CAD managed to settle above the 50 EMA and will try to establish an upside trend. RSI is still in the moderate territory so there is plenty of room to gain additional momentum in case the U.S. dollar continues to gain ground against a broad basket of currencies.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
