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USD/CAD Daily Forecast – Resistance At 1.2380 Stays Strong

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·2 min read
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U.S. Dollar Is Mostly Flat Against Canadian Dollar

USD/CAD is trying to settle above the resistance level at 1.2380 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index managed to get above the 20 EMA at 93.80 but failed to get to the test of the next resistance level which is located at 94. In case the U.S. Dollar Index moves back below the 20 EMA, it will move towards the support level at 93.50 which will be bearish for USD/CAD.

Today, Canada reported that Wholesale Sales increased by 1.1% month-over-month in September compared to analyst consensus which called for growth of 0.2%.

The report had minimal impact on currency dynamics as foreign exchange market traders remained focused on the dynamics of commodity markets. WTI oil made an attempt to settle above the $85 level but lost momentum and pulled back towards the $84 level which was bearish for commodity-related currencies, including Canadian dollar.

It should be noted that Bank of Canada will announce its Interest Rate Decision on Wednesday, so trading may be choppy in the next few days as traders prepare for this event.

Technical Analysis

USD to CAD is testing the resistance level at 1.2380. In case this test is successful, USD to CAD will head towards the next resistance level which is located at 1.2400.

If USD to CAD manages to settle above the resistance at 1.2400, it will continue its rebound and move towards the next resistance level at 1.2425. A move above this level will open the way to the test of the resistance at 1.2450.

On the support side, the nearest support level for USD to CAD is located at 1.2340. In case USD to CAD settles below this level, it will head towards the support at 1.2320. RSI has moved back into the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge. If USD to CAD gets below 1.2320, it will move towards the support at 1.2300.

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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