Current trend

The quotes of the USD/CAD pair are correcting around 1.3393 amid the stabilization of the US currency and weak statistics from Canada.

The Unemployment Rate in the country has been rising for the third month in a row, and in July it reached 5.5% amid job cuts. The most negative dynamics was recorded in the construction sector, where the labor outflow amounted to 45.0 thousand (-2.8%), and the increase in employment fell on agriculture, where 12.0 thousand vacancies were closed (4.6%). However, the share of the economically active population also decreased, amounting to 65.6% compared to 65.7% previously. Monday was a bank holiday in Canada, but trading will resume today, and at 14:30 (GMT 2) investors will pay attention to foreign trade data.

As for the American currency, its quotes continue to rise around 102.000 in the USD Index. Despite the positive dynamics, investors are alarmed by the Fitch rating agency's decision to downgrade the US long-term credit rating by one notch, from AAA to AA . Analysts expect that over the next three years the country will experience a deterioration in the financial situation and an increase in the debt burden. Still, most experts are confident that the downgrade is another possible way to draw the attention of the authorities to the problem of public debt, which has already exceeded 100.0% of Gross Domestic Product (GDP).

Support and resistance

On the daily chart, the price is correcting as part of the formation of a global descending corridor with dynamic boundaries 1.3460–1.3010, approaching the resistance line.

Technical indicators have reversed and continue to hold a buy signal, which is gradually strengthening: the fluctuation range of the Alligator indicator EMAs started expanding again and the histogram of the AO oscillator is forming new correction bars, retreating from the transition level.

Support levels: 1.3310, 1.3150.

Resistance levels: 1.3450, 1.3640.

Trading tips

Long positions can be opened after the price consolidates above 1.3450 with the target at 1.3640. Stop-loss — 1.3350. Implementation time: 7 days and more.

Short positions can be opened after the price consolidates below the local support level of 1.3310 with the target of 1.3150. Stop-loss — 1.3400.