Current trend

The USD/CAD pair is actively adding in value, trying to continue moving towards the 1.3385 area as a result of the strengthening of the dollar against the backdrop of positive macroeconomic statistics.

Last week, preliminary data on US Gross Domestic Product (GDP) for the second quarter were released. The indicator was 2.4%, exceeding the forecast of 1.8% and the previous value of 2.0%. Thus, the probability of a recession in the national economy this year tends to zero, and investors switch to buying the US currency, supported by a high interest rate of 5.50%.

On Friday at 14:30 (GMT 2), statistics on the labor market will be presented in Canada. According to forecasts, Employment Change may add 20.6 thousand after the previous value of 59.9 thousand, which, nevertheless, will be a positive signal for purchases of the Canadian dollar. In addition, the Unemployment Rate may correct from 5.4% to 5.5%, which is unlikely to significantly affect the quotes of the USD/CAD pair.

The long-term trend remains descending. Now an upward correction is developing with the target of 1.3385, after reaching which it is worth considering new short positions in the asset. If the level of 1.3385 is broken out, the growth will continue to the level of 1.3660. The boundary of the long-term downtrend is in the area of 1.3830.

The mid-term trend is still downtrend. Now the USD/CAD pair is trading in an upward correction and is testing the resistance area of 1.3387-1.3310, and if it is held by the sellers, the decline is likely to continue with the target of 1.3125. If the level of 1.3125 is broken down, the next sell target will be target zone 3 (1.2989–1.2969). If during the trading session the price manages to consolidate above the level of 1.3387, the mid-term trend will change to an upward one. In this case, it is worth considering long positions with the target in the target zone 2 (1.3557–1.3535).

Support and resistance

Resistance levels: 1.3385, 1.3660.

Support levels: 1.3135, 1.2970.

Trading tips

Short positions may be opened from the level of 1.3135 with target at 1.3135 and stop-loss at 1.3485. Implementation time: 9-12 days.

Long positions may be opened from the level of 1.3485 with target at 1.3660 and stop-loss at 1.3405.