Current trend

The USD/CAD pair is slightly declining against the Canadian currency, holding at 1.3620 in anticipation of new drivers for movement.

Today at 16:00 (GMT 2), the University of Michigan Consumer Confidence Index is due in the US, which may adjust from 68.2 points to 68.5 points in July. At 14:30 (GMT 2), investors will pay attention to the data on June manufacturing inflation, which may reflect an increase in the indicator from 2.2% to 2.3% YoY and from –0.2% to 0.1% MoM, while the core producer price index excluding food and energy products may increase from 2.3% to 2.5%. Yesterday’s report on the consumer price index showed a slowdown from 3.3% to 3.0% YoY, below estimates of 3.1%, and by 0.1% MoM after zero dynamics last month, although analysts expected an increase of 0.1%. The core value changed from 0.2% to 0.1% and from 3.4% to 3.3% MoM and YoY, respectively. Given this information and statistics from the labor market, which reflected its cooling, US Fed officials may switch to a “dovish” course during the September meeting. On the other hand, the number of initial jobless claims for the week ending July 5 decreased from 239.0K to 222.0K against the estimates of 236.0K, and continuous claims for the week ending June 28 from 1.856M to 1.852M against the expected 1.860M.

There are practically no key statistics expected from Canada during the day, so traders may only focus on the dynamics of issued building permits in the country. According to forecasts, the May indicator will adjust from 20.5% to –5.0%.

Support and resistance

On the daily chart, Bollinger Bands are trying to reverse horizontally. The price range is expanding from below, letting the “bears” renew local lows. The MACD histogram is falling below the signal line, maintaining a poor sell signal. Stochastic, on the contrary, is growing, poorly correlating with the real dynamics of the market, and it is better to wait for the indicator signals to be clarified.

Resistance levels: 1.3650, 1.3675, 1.3700, 1.3733.

Support levels: 1.3614, 1.3588, 1.3550, 1.3524.

Trading tips

Short positions may be opened after a breakdown of 1.3614, with the target at 1.3550. Stop loss — 1.3650. Implementation period: 2–3 days.

Long positions may be opened after a rebound from 1.3614 and a breakout of 1.3650, with the target at 1.3700. Stop loss — 1.3614.