USD/CAD Video 31.07.20.
U.S. Dollar Fails To Gain More Momentum Against The Canadian Dollar
USD/CAD failed to settle above the 20 EMA at 1.3460 and pulled back closer to 1.3400.
Interestingly, the U.S. dollar is gaining ground against a broad basket of currencies today while WTI oil is making another attempt to settle below the $40 level but these catalysts fail to provide support to USD/CAD.
The U.S. Dollar Index has found support near 92.5 and managed to rebound above the 93 level.
The U.S. Dollar Index is seriously oversold so the current rebound may continue in case the right catalysts emerge. Such scenario will be bullish for USD/CAD.
The main worry for U.S. dollar bulls right now is the continued delay of the new U.S. coronavirus aid package due to disagreements between Republicans and Democrats.
The special unemployment benefits of $600 per week are set to expire, and U.S. consumers clearly need additional support.
While Personal Income declined by 1.1% in June after falling by 4.4% in May, Personal Spending increased by 5.6%. This would have not been possible without material government aid.
Meanwhile, Canada reported that its GDP increased by 4.5% month-over-month in May after falling by 11.7% in April. Unfortunately, Canada reports GDP data with a significant time lag so the current report will have no material impact on USD/CAD trading dynamics.
USD to CAD is currently trading in a range between the support level at 1.3330 and the resistance level at the 20 EMA at 1.3460.
At this point, it looks like USD to CAD will need material catalysts to get out of this range.
In case USD to CAD manages to settle below the low end of the current trading range at 1.3330, it will head towards the next support level at 1.3270.
On the upside, a move above the 20 EMA will signal that USD to CAD is ready for an upside move.
However, USD to CAD will have to get above the major resistance at 1.3500 before it may gain significant upside momentum.
For a look at all of today’s economic events, check out our economic calendar.