US Markets

USD/CAD Daily Forecast – U.S. Dollar Is Under Pressure At The Start Of The Week

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USD/CAD Video 19.10.20.

Canadian Dollar Gains Ground On Strong Oil And U.S. Stimulus Hopes

USD/CAD is under pressure as the U.S. dollar is losing ground against a broad basket of currencies while WTI oil is trying to settle above the $41 level despite worries about the second wave of coronavirus in Europe.

The U.S. Dollar Index has managed to settle below 93.50 and tries to gain additional downside momentum on hopes for a new coronavirus aid package in the U.S.

According to recent reports, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will resume negotiations today. Nancy Pelosi has previously set a deadline of October 20 for a vote in case Republicans and Democrats want to pass the new aid bill before the election.

Today, Canada reported that Wholesale Sales increased by 0.3% month-over-month in August. The report was fully in line with the analyst consensus.

This week, USD/CAD traders will have a chance to evaluate the latest inflation data from Canada which will be published on Wednesday. Inflation Rate is expected to grow by 0.4% year-over-year in September while Core Inflation Rate is projected to increase by 0.7%.

On Thursday, the Bank of Canada will announce its Interest Rate Decision and present its Monetary Policy Report. The rate is expected to stay unchanged at 0.25% so traders will focus on the Bank’s commentary about its plans to support the economy.

Technical Analysis

USD to CAD managed to settle below the support at 1.3200 and developed material downside momentum. The nearest support level for USD to CAD is located at 1.3135.

In case USD to CAD moves below this level, it will head towards the next support level at October lows at 1.3100. A move below 1.3100 will open the way to the test of the support at 1.3050.

On the upside, the previous support at 1.3200 will likely serve as the first resistance level for USD to CAD. The 20 EMA is located in the nearby so this resistance level is set to be strong.

If USD to CAD settles above the resistance at 1.3200, it will gain upside momentum and move towards the next resistance at the 50 EMA at 1.3240.

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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