USD/CAD Video 13.08.20.
U.S. Dollar Continues To Lose Ground Despite Better-Than-Expected U.S. Employment Reports
USD/CAD has managed to get below the nearest support level at 1.3235 and tries to gain more downside momentum.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has recently tried to settle below the 93 level but rebounded towards 93.20.
The recent weakness of the U.S. dollar is a major catalyst for the downside of USD/CAD, especially at a time when oil failed to develop upside momentum above the resistance level at $42.50.
Today, the U.S. has provided Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims declined to 963,000, slipping below 1 million for the first time since the beginning of the crisis. Continuing Jobless Claims declined to 15.5 million.
Meanwhile, there is no clarity regarding the fate of the next U.S. coronavirus aid package. Negotiations between Republicans and Democrats have stalled, putting pressure on the U.S. dollar.
USD to CAD is currently trying to settle below the nearest support level at 1.3235. It has already tested the next support level at 1.3200 but did not manage to gain sufficient downside momentum.
In case USD to CAD manages to settle below the support at 1.3200, it will likely gain more downside momentum and continue its current downside trend.
At this point, USD to CAD needs to stay below the previous support at 1.3235 to have a chance to get to the second test of the support at 1.3200.
If this does not happen, USD to CAD will return back above 1.3235 and may find itself in a range between the support at 1.3235 and the resistance at 1.3330.
A move above 1.3330 will open the way to the test of the next resistance level at the 20 EMA at 1.3360.
The 20 EMA is the main level for USD to CAD since it has served as serious resistance during recent rebound attempts. Thus, a move above the 20 EMA will mark the end of the current downside trend.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire