Current trend

Despite some improvement in Canadian macroeconomic statistics, the USD/CAD pair falls, trading at 1.3442.

Thus, the July industrial goods price index increased by 0.4%, which led to an increase in the rate from –5.5% to –2.7% YoY, and the raw materials index increased by 3.5% MoM and from –20.2% to –11.1% YoY. The cost of new housing decreased by 0.1% after rising by 0.1% in June. Tomorrow, the core retail sales index will be published, the strengthening of which will be able to support the Canadian currency.

The US dollar slowed down the positive dynamics, trading at 103.000 in the USD Index but already tonight, analysts will receive data on existing home sales, which may continue the downward trend that began in March and correct from 4.16M to 4.15M, which will put pressure on the US currency.

Support and resistance

On the daily chart, the price is correcting above the resistance line of the global downward corridor with dynamic boundaries 1.3380–1.3000, approaching the May highs.

Technical indicators reinforce the buy signal: the range of EMA fluctuations on the Alligator indicator is expanding, and the AO histogram is forming correctional bars, moving away from the transition level.

Resistance levels: 1.3600, 1.3740.

Support levels: 1.3490, 1.3360.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.3600 with the target at 1.3740. Stop loss – 1.3530. Implementation period: 7 days or more.

Short positions may be opened after the price drops and consolidates below 1.3490 with the target at 1.3360. Stop loss – 1.3540.