The ongoing trend

During the Asian session, the USD/CAD currency pair corrected to 1.4070: the Canadian currency remains under pressure, while the acceleration of the US dollar provides upward momentum for the asset.

According to Statistics Canada (StatsCan), net income before taxes (NIBT) fell 2.5%, or CAD4.1 billion, to CAD157.4 billion after the reporting period is almost over for the third quarter, with the financial sector experiencing the sharpest decline: ten of thirteen industries recorded a total decline of 5.5%, or CAD2.5 billion, to CAD44.8 billion. In the non-financial sector, 17 of 39 subsectors reported earnings declines, totaling 1.3%, or CAD1.5 billion, to CAD112.6 billion.

The US dollar remains very volatile and is trading today at 106.70 points in USDX. This is happening against the backdrop of a weakening real estate market: In October, the number of new home sales fell by -17.3% from 738.0 thousand to 610.0 thousand (annual low), which almost reached the value of November 2023. The increase in the Conference Board Consumer Confidence Index from 109.8 points to 111.7 points in November could not be offset.

Investors' attention is focused on the comments of US President-elect Donald Trump, who has announced that he will impose tariffs of 25.0% on all goods from Mexico and Canada and an additional 10.0% on Chinese goods on his first day in office. Some experts note that the tariffs aimed at China are significantly lower than the previously estimated 60.0%, increasing the likelihood that a major trade conflict may be avoided. Nevertheless, some investors fear that the announced plans will be adjusted over time.

support and resistance

In the daily chart, the trading instrument corrects within the uptrend channel with the dynamic boundaries of 1.4200–1.4000.

The technical indicators continue to provide buy signals: the EMA swing range of the Alligator indicator remains spacious; the fast EMAs are moving away from each other; the AO histogram is forming corrective bars above the transition level.

Supports: 1.4010, 1.3820.

Resistances: 1.4100, 1.4250.

trading tips

Long positions are current in case of upward movement with price consolidation above 1.4100 with price target of 1.4250 and stop loss at 1.4020. Validity: 7 days or more.

Short positions are intact in case of downward movement with price consolidation below 1.4010 with price target of 1.3820 and stop loss at 1.4100.