Current trend

The USD/CAD pair is correcting at 1.3704 amid the strengthening of the American dollar and poor macroeconomic statistics from Canada.

Thus, the August exports fell by 1.0%, while imports grew by 0.3%, so the trade balance deficit changed from –0.287B Canadian dollars to –1.1B Canadian dollars, remaining in the red zone for the sixth month. Of the eleven types of products, six demonstrated a weakening. The leaders were energy products (–3.1%), within which oil and oil products decreased the most (–4.1%). In addition, exports of forestry products slowed significantly (–5.5%). The most positive export dynamics were recorded in the category of transport and spare parts (5.1%), within which sales of passenger cars increased the most (6.1%).

The American dollar reached 102.60 in USDX after yesterday’s publication of the September US Fed meeting minutes, which reflected the unanimous decision to cut the interest rate by 50 basis points. Against a positive report on the labor market, almost all experts are confident in the interest rate change by –25 basis points in November, supporting the national currency. The refusal to change the indicator more aggressively reduces risk factors.

In these conditions, continued growth of the USD/CAD pair is most likely.

Support and resistance

On the daily chart, the trading instrument moves in the range between the first-order levels (I). After a reversal at the right support level of the first order (I) at 1.3510, the price is correcting upwards. The current trend is growth to the crossroad of the right resistance of the third order (III) and the left resistance of the third order (III) at 1.3746 and to the crossroad of the left resistance of the second order (II) and the right resistance of the third order (III) at 1.3874.

After a reversal, further dynamics will develop within a poor downward trend. The short-term target is the crossroad of the right support of the third order (III) and the left support of the second order (II) at 1.3698, and the long-term target is the crossroad of the left support of the second order (II) and the right support of the first order (I) at 1.3568.

Resistance levels: 1.3746, 1.3874.

Support levels: 1.3698, 1.3568.

Trading tips

Long positions may be opened after the consolidation above 1.3746, with the target at 1.3874. Stop loss — 1.3700. Implementation period: 7 days or more.

Short positions may be opened after the price consolidates below 1.3698, with the target at 1.3568. Stop loss – 1.3740.