Current trend

This week, USD/CAD continues the downward correction dynamics and has already reached 1.3625 in anticipation of the publication of Canadian inflation data today at 14:30 (GMT 2). Thus, the indicator may fall from 2.7% to 2.5% YoY but grow from –0.1% to 0.4% MoM, while the core value remains at 1.9% YoY, and the general consumer price index will correct from 2.3% to 2.2%, supporting the positions of the Canadian dollar against the Bank of Canada keeping the interest rate at a peak of 4.50%. After the publication of statistics, the dynamics on the USD/CAD chart may change but until then the pair will likely experience pressure from sellers.

The long-term trend remains upward but market participants are already testing the key support area of ​​1.3625–1.3595. If the “bulls” hold it, a new upward momentum will appear, and then the target of the movement will be the resistance level of 1.3780. Its breakout will act as a catalyst for reaching 1.3887 but if during trading the key support area of ​​1.3625–1.3595 is broken downwards, the trend will reverse downwards. In this case, it is worth considering short positions, with the targets of 1.3500 and 1.3438. The RSI (21) indicator is approaching the oversold zone but does not enter it, so you can open both sell and buy deals.

The medium-term trend changed to a downward one last week. Traders have broken through target zone 2 (1.3755−1.3736) with the prospect of reaching the range of 1.3568−1.3550. After testing zone 2, the price may go into an upward correction, and if it starts from current prices, the instrument may reach the key trend resistance area of ​​1.3829−1.3810, after which it is worth considering short positions, with the target at the low of the current week of 1.3625.

Support and resistance

Resistance levels: 1.3780, 1.3887.

Support levels: 1.3625, 1.3595, 1.3500.

Trading tips

Long positions may be opened at the level 1.3625, with the target at 1.3780 and stop loss 1.3575. Implementation period: 9–12 days.

Short positions may be opened below 1.3575, with the target at 1.3500 and stop loss 1.3605.