Current trend

Amid the weakening of the American currency, the USD/CAD pair is correcting at 1.3569.

The Canadian currency is strengthening, holding above last week’s levels, amid the wholesale trade report. The July indicator, excluding oil and grain crops, increased by 1.1% MoM and 0.4% to 82.7B Canadian dollars YoY. Positive dynamics were demonstrated by four out of seven sectors, and the leaders were agricultural trade ( 9.2%), as well as beverages and hardware ( 1.7%), while the values ​​for personal goods (–22.2%) and household goods (–2.5%) decreased the most. Due to more active production, inventories of goods increased in July from –0.1% to 0.5%, and the inventory-to-sales ratio was 1.54 points, the same as last month, reflecting the stability in the industry.

Since the beginning of the week, the American dollar has been declining, trading at 101.00 in the USDX. Investors reacted neutrally to Friday’s data on price indices in international trade: in August, the index export was –0.7% MoM and YoY after growing by 1.2% earlier, and the import index –0.3% MoM and 0.8% YoY, below 1.7% earlier. Thus, US foreign trade has been slowing for the second month, and one of the reasons may be peak interest rates, which have already begun to decline in most other leading countries.

Support and resistance

On the daily chart, the trading instrument is correcting, rising within the ascending channel with dynamic boundaries of 1.3710–1.3600.

Technical indicators are weakening the sell signal: the EMAs fluctuation range on the Alligator indicator is narrowing, and fast EMAs are approaching each other. The AO histogram is forming correction bars, approaching the transition level from below.

Resistance levels: 1.3610, 1.3710.

Support levels: 1.3540, 1.3440.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.3610, with the target at 1.3710. Stop loss — 1.3550. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 1.3540, with the target at 1.3440. Stop loss – 1.3600.