USD/CAD Daily Forecast – Test Of Support At 1.2380
Canadian Dollar Tries To Gain More Ground Against U.S. Dollar
USD/CAD is currently trying to settle below the support at 1.2380 while the U.S. dollar is mostly flat against a broad basket of currencies.
The U.S. Dollar Index is testing the support level at 94. In case this test is successful, it will head towards the 20 EMA at 93.85 which will be bearish for USD/CAD.
Today, U.S. reported that Industrial Production declined by 1.3% month-over-month in September compared to analyst consensus which called for growth of 0.2%. Manufacturing Production decreased by 0.7% while analysts expected that it would grow by 0.1%.
Foreign exchange market traders continued to monitor the developments in commodity markets. WTI oil made an attempt to get to the test of the $84 level but lost momentum and pulled back below $83, which put some pressure on the Canadian dollar.
Meanwhile, the yield of 10-year Treasuries managed to get above 1.60% but failed to settle above this level and declined towards 1.59%. A move above 1.60% will open the way to the test of the resistance at 1.64% which will be bullish for the American currency.
Technical Analysis
USD to CAD is currently testing the support level at 1.2380. In case this test is successful, USD to CAD will get to another test of the next support level which is located at 1.2340.
A move below the support at 1.2340 will open the way to the test of the support at 1.2320. If USD to CAD declines below this level, it will head towards the next support level at 1.2300.
On the upside, USD to CAD needs to stay above 1.2380 to have a chance to develop upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2400.
If USD to CAD manages to settle above 1.2400, it will head towards the resistance level at 1.2425. A successful test of this level will open the way to the test of the resistance at 1.2450.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
