Current trend

The USD/CAD pair is showing weak corrective growth, consolidating near 1.3500 in anticipation of new drivers of movement. Pressure on the instrument remains amid a possible reduction in the cost of borrowing by the US Federal Reserve during the September meeting following the speech of the Chair of the regulator Jerome Powell at the annual Economic Symposium in Jackson Hole on Friday, August 23.

For the first time in a long time, the official expressed confidence in a further reduction in inflation to the target of 2.0%, noting that the risks of a resumption of negative dynamics are being leveled out every day, while for the labor market, on the contrary, they are increasing, and the regulator will try to take the necessary steps to quickly stabilize the sector. The official dismissed concerns about another national recession in the near future, arguing that the rise in unemployment was consistent with a slowdown in hiring rather than a sudden surge in job cuts. Overall, the speech by the Chair of the US Federal Reserve is consistent with market expectations and announces the first interest rate cut of 25 or 50 basis points during the September meeting, so the American currency is actively declining, despite the fact that data on the dynamics of New Home Sales in the US were generally positive. In July, the indicator increased by 10.6% after 0.3% in the previous month, and in absolute terms, volumes increased from 0.668 million to 0.739 million, better than the forecast of 0.630 million.

Statistics from Canada showed a 0.3% decline in Retail Sales in June, after –0.8% the previous month, while the figure excluding autos rose 0.3% after –1.2%, while analysts had expected –0.2%.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is expanding from below; however, it fails to catch the surge of the "bearish" sentiment at the moment. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic is still located near its lows, indicating the risks of oversold US currency in the ultra-short term.

Resistance levels: 1.3524, 1.3550, 1.3588, 1.3614.

Support levels: 1.3500, 1.3450, 1.3400, 1.3350.

Trading tips

Short positions may be opened after a breakdown of 1.3500 with the target at 1.3400. Stop-loss — 1.3550. Implementation time: 2-3 days.

A rebound from 1.3500 as from support followed by a breakout of 1.3550 may become a signal for opening new long positions with the target at 1.3650. Stop-loss — 1.3500.