Current trend

The USD/CAD pair shows mixed trading dynamics, holding near 1.3670. Activity on the market remains low, as trading participants expect the emergence of new drivers of movement.

Today, May labor market report will be published, which could significantly influence the US Federal Reserve on easing monetary policy later in 2024. Forecasts indicate a possible increase in Nonfarm Payrolls from 175.0 thousand to 185.0 thousand, the Average Hourly Earnings, which affect the dynamics of inflation in the country, are expected to amount to 0.3% after 0.2%, and the Unemployment Rate is likely to remain at 3.9%. Investors' attention remains focused on the May data on business activity: the Services PMI increased from 51.3 points to 54.8 points, and the Composite PMI increased from 51.3 points to 54.5 points. Thus, the national economy is recovering, despite the regulator’s "hawkish" rhetoric, maintaining the risks of accelerating inflation and helping to keep the key interest rate at peak values throughout the year.

Today at 14:30 (GMT 2), a report on the Canadian labor market will also be presented: analysts suggest that in May the Employment Change may decrease from 90.4 thousand to 22.5 thousand, the Unemployment Rate might adjust from 6.1% to 6.2%, while the Average Hourly Wages will remain around 4.8%. Also, investors remain focused on the Bank of Canada's decision to reduce the interest rate by 25 basis points against the backdrop of the success of the national economy in the fight against inflationary pressure. Regulator officials also noted that if the Consumer Price Index does not respond to the adjustment in borrowing costs with growth, they are ready to further ease monetary conditions.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is slightly changing, being spacious enough for the current activity level in the market. MACD stretches along the zero level, often forming opposite trading signals, and at the moment one should wait for their clarification from the technical indicator. Stochastic is showing similar dynamics being located in the middle of its area.

Resistance levels: 1.3675, 1.3700, 1.3730, 1.3762.

Support levels: 1.3650, 1.3614, 1.3580, 1.3550.

Trading tips

Short positions may be opened after a breakdown of 1.3650 with the target at 1.3580. Stop-loss — 1.3675. Implementation time: 2-3 days.

A rebound from 1.3650 as from support followed by a breakout of 1.3675 may become a signal for opening new long positions with the target at 1.3730. Stop-loss — 1.3650.