Current trend

Amid the rapid strengthening of the American currency, the USD/CAD pair is correcting upwards at the level of 1.3730.

The Canadian dollar did not receive support after the publication of retail sales data. The May indicator fell by 0.8% to 66.1B Canadian dollars, demonstrating negative dynamics in eight out of nine sectors, of which the food and beverage trade decreased the most. The core value changed from 1.2% to –1.4%, and a drop in revenue was recorded in all major sectors, where the leaders were food (–1.9%) and alcoholic beverages (–3.3%). In addition, the e-commerce indicator decreased by 3.6% to 3.9B Canadian dollars, amounting to 5.9% of total sales compared to 6.1% previously.

The American currency is holding at 104.00 in USDX, almost completely offsetting last week’s decline. Yesterday, the incumbent US President Joe Biden officially refused to participate in the election race, explaining this decision by the interests of the Democratic Party, naming Kamala Harris, who currently holds the post of vice president, as his successor. Thus, the probability of victory of the Republican candidate Donald Trump is increasing. So, the expectations of changes in the national economy, which he previously stated, support the dollar.

Support and resistance

On the daily chart, the trading instrument is correcting above the support line of the ascending channel with dynamic boundaries of 1.3900–1.3600.

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

Resistance levels: 1.3750, 1.3850.

Support levels: 1.3700, 1.3600.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.3750, with the target at 1.3850. Stop loss — 1.3680. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 1.3700, with the target at 1.3600. Stop loss — 1.3760.