The ongoing trend

The USD/CAD trading instrument is trading at 1.3950 following the release of macroeconomic statistics from the US and Canada.

In November, the University of Michigan's consumer expectations index was 76.9 points, below the forecast of 78.5 points. The sentiment indicator was 71.8 points, compared to 73.7 points. The US inflation expectations indicator for the next five years was 3.2%, above the preliminary estimate of 3.1%, which put pressure on the national currency. The danger of an inflation spiral looks like it did in the 1970s. After the US Federal Reserve raised interest rates significantly, monetary authorities have switched to a dovish course, which could lead to a recession and accelerate inflation: in October it was 2.6 percent (year). The US Federal Reserve is now expected to either further loosen its monetary policy and expect the indicator to continue to approach the target of 2.00 percent, or leave borrowing costs unchanged at the meeting on December 18. But this will put pressure on the economy and the labor market. The number of non-farm jobs reached only 12.0 thousand compared to a forecast of 106.0 thousand.

The Canadian dollar was supported by a rise in the core retail sales index in September to 0.9% m/m from -0.8%, beating forecasts of 0.5% m/m. Retail sales rose 0.4%, in line with estimates, but the new home prices indicator in October was -0.4% m/m, below expectations of 0.1%. In addition, gross domestic product (GDP) in the second quarter changed to 2.1% from 1.8%, against the preliminary estimate of 1.6%. On Friday at 15:30 (GMT 2), investors will be able to assess the statistics for the third quarter - if positive momentum continues, the currency is likely to strengthen.

support and resistance

The long-term trend is bullish. In October-November, the price reached the resistance of 1.4100, after which it entered a correction. The price declined to the support level of 1.3950 amid the correction. In case of its maintenance, the price is expected to rise to 1.4100, otherwise it is likely to decline to 1.3820.

As part of the medium-term uptrend, last week the prices rose to zone 3 (1.4094-1.4071), from where the correction began with the target in the support area of 1.3909-1.3890. After reaching this, long positions are relevant with the main target at last week's high of 1.4103.

Supports: 1.3950, 1.3820, 1.3645.

Resistances: 1.4100, 1.4250, 1.4350.

trading tips

Long positions are relevant from 1.3950 with a price target of 1.4100 and stop loss at 1.3917. Validity: 9-12 days.

Short positions are intact below 1.3917 with a target of 1.3820 and a stop loss at 1.3958.