The Canadian dollar continues to gain ground against the US dollar
USD / CAD is currently attempting to stabilize below support at 1.3135 as the US Dollar continues to lose ground against a large basket of currencies.
The US dollar index has been under pressure since the start of the day. It has already managed to break below the 50 EMA at 93.60 and is currently testing the next level of support at the 20 EMA at 93.45. If the US dollar index manages to settle below this level, it will head towards the major support level at 93 which will be bearish for the USD / CAD.
Today, all traders will be focusing on the US presidential election. At this point, the market believes that U.S. lawmakers will reach consensus on the massive coronavirus aid bill after the election, which would be good for stocks and bad for the U.S. dollar.
In addition to the expectations of a massive post-election stimulus bill, the Canadian dollar is boosted by recent strength in oil prices. Today, oil managed to pick up strong upward momentum and tested resistance at the $ 38 level, providing support to commodity currencies.
The USD to CAD has managed to gain significant bearish momentum and is currently attempting to move below support at 1.3135. If the USD to CAD is able to move below this level, it will take another test of the major support level at 1.3100. This level has been tested several times in recent weeks and has proven its strength.
In case USD to CAD drops below support at 1.3100, it will move to October lows near 1.3080. A move below support at 1.3080 will pave the way for testing the next level of support at 1.3050.
On the upside, a move above 1.3135 will pave the way for the resistance level at 1.3200. There are no material levels between 1.3135 and 1.3200 so this move can be fast.
If the USD to CAD moves above 1.3200, it will head towards resistance at 20 EMA at 1.3220. A move above the 20 EMA will lead to the test of the next resistance at the 50 EMA at 1.3235.
For an overview of all of today’s economic events, check out our economic calendar.