Current dynamics

The USD/CAD pair appreciated for the second consecutive week and is currently testing the level of 1.3793 (Murray level [8/8]): the Canadian currency remains under pressure ahead of the Bank of Canada meeting, where the interest rate could be adjusted from 4.75% to 4.50%, supported by June inflation statistics, which confirmed a slowdown from 2.9% to 2.7% in annual terms and an increase in the unemployment rate of 6, 2% to 6.4%. Under these conditions, the second consecutive easing of monetary policy seems quite logical, in addition, the head of the regulator Tiff Macklem previously noted that the reduction in the cost of borrowing will be possible with a planned slowdown in the consumer price index. In doing so, officials seek to provide a "soft landing" to the economy without significant job losses.

On the other hand, the US dollar is supported by political factors that currently dominate the market. Most experts still expect Donald Trump's victory in the presidential election, despite the replacement of the Democratic candidate with Joe Biden by Kamala Harris. In the event of a change in the White House administration, fiscal policy is likely to undergo significant adjustments, which, on the one hand, will contribute to economic growth, but, on the other, will increase the risks of inflation. All this can lead to the refusal of the US Federal Reserve to reduce the cost of borrowing or slow down this process, providing support for the exchange rate of the US currency against competitors.

Therefore, in the short term, the bullish dynamics of the USD/CAD pair quotes seems to be the most likely scenario.

Support and resistance levels

Technically, the pair has returned to the long-term ascending channel and is testing the level of 1.3793 (Murray level [8/8]), the break of which will allow quotes to continue rising towards the targets of 1.3855 (Murray level [ 2 /8]) and 1.3916 (Murray level [ 2/8], W1). The key level for the "bears" is the level of 1.3732 (Murray level [6/8]), fixing below which will be the catalyst for the movement towards the area of ​​1.3671 (Murray level [4/8] , the middle line of the Bollinger bands) and 1.3610 (Murray level [2/8]).

Technical indicators signal the continuation of the bullish trend: the Bollinger bands and the stochastic are heading upwards, although the latter has entered the overbought zone, and the MACD is declining in the positive zone.

Resistance levels: 1.3793, 1.3855, 1.3916.

Support levels: 1.3732, 1.3671, 1.3610.

Business scenarios

Long positions can be opened above the level of 1.3793 with the targets at 1.3855, 1.3916 and the stop-loss in the area of ​​1.3750. The implementation period: 5–7 days.

Short positions should be opened below the level of 1.3732 with the targets at 1.3671, 1.3610 and the stop loss in the area of ​​1.3775.