USD/CAD Video 14.09.20.
Weak Oil Puts Some Pressure On The Canadian Currency
USD/CAD failed to settle above 1.3200 as the U.S. dollar found itself under pressure against a broad basket of currencies.
The U.S. Dollar Index managed to get below the 20 EMA at 93.10 and is currently trying to settle below 92.90. The nearest minor support level for the U.S. Dollar Index is located at the recent lows at 92.70, while the closest significant support is at 92.50.
If the U.S. Dollar Index gains additional downside momentum and heads to 92.50, USD/CAD will find itself under material pressure.
Meanwhile, WTI oil failed to gain more upside momentum amid fears about the pace of the oil demand recovery, putting some pressure on commodity-related currencies including the Canadian dollar.
There are no important economic reports scheduled to be released today in the U.S. and Canada so USD/CAD trading dynamics will mostly depend on general market sentiment.
Judging by today’s strength of Japanese yen and the solid performance of the precious metals segment, the market has certain fears about the future trajectory of the economic recovery. As demand for safe haven assets increases, the U.S. dollar may stay strong against the riskier Canadian dollar even when the American currency is under pressure against a broad basket of currencies.
USD to CAD continues to trade above the nearest support level at the 20 EMA at 1.3160. In case USD to CAD is able to settle above 1.3200, it will gain more upside momentum and head to the test of the nearest resistance level at 1.3235.
A move above the resistance at 1.3235 will allow USD to CAD to test the major resistance at the 50 EMA at 1.3260.
On the support side, a move below the 20 EMA at 1.3160 will present a serious problem for the bulls as USD to CAD will have a good chance to develop downside momentum.
The next support level is located at 1.3135. If USD to CAD manages to settle below this level, it will head towards the next material support level at 1.3050.
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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