Current trend

Amid the strengthening of the American dollar and positive macroeconomic statistics from Canada, the USD/CAD pair is correcting upwards around 1.3755.

In April, the total value of issued building permits increased by 20.5% and reached 12.8B Canadian dollars, the volume of applications for the construction of objects in the residential sector added 21.0% to 8.0B Canadian dollars, and in the non-residential sector – 19.6% to 4.8B Canadian dollars. The authorities approved the construction of 22.600 multi-family buildings and 4.300 individual buildings, a multi-year record. The indicators provided significant support to the economy, reflecting the real estate market recovery.

The American dollar is trading at 105.30 in USDX. Investors are still assessing the results of the US Fed’s monetary policy meeting, predicting how the decision to keep interest rates in the range of 5.25–5.50% will affect the dynamics of the quotes soon. Now, they perceive the impact of statistics from the labor market, published yesterday, as a short-term correction that will not have a long-term impact on the currency. Initial jobless claims increased from 229.0K to 242.0K, and the total claims from 1.790M to 1.820M.

Support and resistance

On the daily chart, the trading instrument is correcting above the support line of the channel with dynamic boundaries of 1.4000–1.3650.

Technical indicators are holding the buy signal: the EMA oscillation range on the Alligator indicator is expanding upward, and the AO histogram is forming ascending bars above the transition level.

Resistance levels: 1.3760, 1.3850.

Support levels: 1.3710, 1.3600.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.3760, with the target at 1.3850. Stop loss – 1.3710. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 1.3710, with the target at 1.3600. Stop loss – 1.3760.