Current trend

Amid the strengthening of the American currency, the USD/CAD pair is correcting upwards, trading at 1.3842.

Canadian macroeconomic statistics failed to support the national currency. Only nine out of twenty sectors demonstrated employment growth in May. Among them are healthcare (0.6%), educational services (0.6%), and retail trade (0.2%). A decrease in employment was recorded in the public administration (–0.3%), administrative (–0.3%), and utilities (–1.0%) sectors. In general, the total May number of vacancies amounted to 559.700K, almost the same as in April but slightly better than three months of consecutive decline earlier.

The American dollar is trading at 104.20 in USDX. Today at 16:00 (GMT 2), the JOLTS data on the number of open vacancies is due. Analysts assume that the June figure will decrease from 8.140M to 8.030M. Given the negative statistics on initial jobless claims, as well as reports on nonfarm payrolls, the labor market is still quite poor, which may become an obstacle for US Fed officials when implementing a possible reduction in interest rates. In addition, the US national debt has reached 35.0T for the first time in history, which also limits the capabilities of financial authorities. According to the US Congressional Budget Office, by 2034, the figure will reach 50.7T dollars, or 122.0% of the country’s gross domestic product (GDP), and the budget deficit will be 2.8T dollars.

Support and resistance

On the daily chart, the price is correcting, approaching the resistance line of the ascending channel with dynamic boundaries of 1.4000–1.3680.

Technical indicators are strengthening the buy signal: the EMA oscillation range on the Alligator indicator is expanding upwards, and the AO histogram is forming ascending bars above the transition level.

Resistance levels: 1.3870, 1.3970.

Support levels: 1.3820, 1.3720.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.3870, with the target at 1.3970. Stop loss — 1.3800. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 1.3820, with the target at 1.3720. Stop loss — 1.3900.