USD/CAD Daily Forecast – Support At 1.2720 In Sight
USD/CAD Video 15.12.20.
Canadian Dollar Is Gaining Ground Against U.S. Dollar
USD/CAD is trying to settle below the support at 1.2750 while the U.S. dollar is losing ground against a broad basket of currencies.
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The U.S. Dollar Index is currently testing the support at the yearly lows at 90.50. The U.S. Dollar Index has previously made several attempts to settle below this level but received strong support near 90.50 and remained in a range between 90.50 and 91. If the U.S. Dollar Index settles below 90.50, it will gain downside momentum and move towards the 90 level which will be bearish for USD/CAD.
Today, U.S. reported that Industrial Production increased by 0.4% month-over-month in November compared to analyst consensus which called for growth of 0.3%. On a year-over-year basis, Industrial Production declined by 5.5%. Meanwhile, Manufacturing Production grew by 0.8% month-over-month compared to analyst consensu of 0.3%.
Canada reported that Housing Starts increased to 246,000 in November compared to analyst expectations of 215,000. It looks like Canada’s housing market remains strong.
Oil is currently trying to settle above multi-month highs, providing support to commodity-related currencies on the foreign exchange market. If WTI oil manages to get above the $48 level, Canadian dollar may get an additional boost.
Technical Analysis
USD to CAD managed to get below the support level at 1.2750 and is heading towards the next support at 1.2720. RSI has entered the oversold territory but remains above recent lows so there is some room to gain additional downside momentum in case the right catalyst emerge.
In case USD to CAD manages to settle below the support at 1.2720, it will head towards the next support at the yearly lows at 1.2700. A move below 1.2700 will push USD to CAD towards the next support at 1.2675.
On the upside, the previous support at 1.2750 will likely serve as the first resistance level for USD to CAD. If USD to CAD settles above this resistance level, it will get to the test of the significant resistance level at 1.2775. A move above this level will open the way to the test of the next resistance at 1.2800.
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