Current trend

The quotes of the USD/CAD pair updated the July maximum in the area of 1.3385 and are now preparing to continue moving to the resistance level of 1.3520.

Morning statistics recorded an increase in Canada's trade deficit in June to -3.73B Canadian dollars from -2.68B Canadian dollars earlier. High imports, as a rule, act as a catalyst for a drop in demand for the national currency and cause its decline in relation to its main competitors, which eventually happened to the Canadian dollar. It should also be noted that according to the American Petroleum Institute (API), the reserves of "black gold" increased by 4,067M barrels over the week, signaling a likely weakening of quotations in the future and, as a result, a drop in sales revenue, which is another negative factor for the export-oriented Canadian economy.

Tomorrow in the USA at 14:30 (GMT 2), inflation statistics will be published, which can change the balance of buyers and sellers in the USD. The indicator is expected to grow by 0.2% on a monthly basis and a correction from 3.0% to 3.3% on an annual basis. If the forecast is justified, the USD/CAD pair may continue to grow with a target at 1.3520, but otherwise the quotes will go into correction with a target at 1.3285.

Support and resistance

The long-term trend is downward. Now the instrument is trading in correction with targets at 1.3520 and 1.3660, after reaching which it is worth considering new short positions with the main target at the July low of 1.3135. Nevertheless, partial profit fixation can be carried out at the level of 1.3285.

The mid-term trend changed to an upward one, when the trading participants broke the 1.3331-1.3310 zone, and also updated the July maximum of 1.3385. Now the movement will continue to the area of 1.3557–1.3535. The key trend support is shifting to 1.3277–1.3256, and if they are overcome as part of the correction, it will be possible to consider long positions with the first target at Tuesday's maximum of 1.3500.

Resistance levels: 1.3520, 1.3660.

Support levels: 1.3285, 1.3135.

Trading tips

Long positions can be opened from 1.3285 with a target at 1.3520 and stop-loss in the area of 1.3225. Implementation time: 9-12 days.

Short positions can be opened below 1.3225 with a target at 1.3100 and stop-loss in the area of 1.3285