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USD/CAD Daily Forecast – Resistance At 1.2400 In Sight

Vladimir Zernov
·2-min read

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD managed to get above the resistance at 1.2380 and is moving towards the next resistance level at 1.2400 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance level at 94. If this test is successful, the U.S. Dollar Index will move towards the next resistance at 94.20 which will be bullish for USD/CAD.

Today, U.S. released Case-Shiller Home Price Index report which indicated that home prices increased by 19.7% year-over-year in August compared to analyst consensus which called for an increase of 20%.

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U.S. New Home Sales grew by 14% month-over-month in September while analysts expected that they would grow by 1%. Consumer Confidence increased from 109.8 in September (revised from 109.3) to 113.8 in October, while analysts expected that it would decline to 108.3.

The stronger-than-expected Consumer Confidence report provided material support to the American currency and pushed the U.S. Dollar Index above the 94 level.

Meanwhile, WTI oil gained upside momentum and managed to get above $84.50. This move was bullish for commodity-related currencies but failed to provide sufficient support to Canadian dollar.

Technical Analysis

USD to CAD is moving towards the resistance level at 1.2400. In case USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2425.

A successful test of the resistance at 1.2425 will lead to the test of the 20 EMA which is located near 1.2435. If USD to CAD settles above the 20 EMA, it will move towards the next resistance level at 1.2450.

On the support side, the previous resistance at 1.2380 will serve as the first support level for USD to CAD. If USD to CAD declines below the support at 1.2380, it will move towards the next support level at 1.2340.

A move below 1.2340 will open the way to the test of the support at 1.2320. If USD to CAD gets below this level, it will head towards the support level 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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