Current trend

Amid the stabilization of the American currency the quotes, the USD/CAD pair is correcting downwards, trading at 1.3480, despite poor Canadian macroeconomic statistics.

Thus, the June retail sales adjusted by –0.3% to 65.7B dollars, while the core indicator added 0.4%. The sales of cars (–2.9%), auto parts (–2.1%), and used cars (–0.6%) decreased the most, but the volume of sales of products in retail chains (1.2%) and in supermarkets (1.8%) increased, as well as sales of beverages (0.4%) and food products (0.5%). Thus, given the ongoing risks of inflation and peak household debt burden caused by the prolonged “hawkish” monetary policy of the Bank of Canada, the indicators demonstrate stability, which could be a key factor for the recovery in the coming periods.

The American dollar is trading at 100.70 in USDX supported by durable goods orders data. Despite the core value falling in July from 0.1% to –0.2%, the overall indicator has corrected from –6.9% to 9.9% a month earlier, while the value excluding the defense industry has added 10.4% after correcting by –7.5% earlier.

Support and resistance

On the daily chart, the trading instrument is moving away from the support line of the ascending channel with dynamic boundaries of 1.3960–1.3620.

Technical indicators are strengthening the sell signal: the EMA fluctuation range on the Alligator indicator is expanding in the downward direction, and the AO histogram is forming downward bars below the transition level.

Resistance levels: 1.3510, 1.3610.

Support levels: 1.3455, 1.3340.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.3455, with the target at 1.3340. Stop loss — 1.3520. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.3510, with the target at 1.3610. Stop loss — 1.3470.