Current dynamics

During the Asian session, the USD/CAD pair is correcting at 1.3982 amid the strengthening of the US dollar.

Statistics Canada (StatsCan) said the industrial price index rose 1.2% month-on-month in October after two straight months of declines, and was up 1.1% year-on-year, reaching its highest since April. The raw materials price index was down 3.8%, with the excluding oil and energy price index up 3.1% month-on-month and -2.8% year-on-year, supporting solid output growth as costs fell.

The US dollar is trading at 107.00 in USDX, the highest since late autumn 2022: the key factor in the currency's strengthening was the positive dynamics of the labor market, where the number of initial applications for unemployment benefits decreased from 219.0 thousand to 213.0 thousand, while the total number of applications amounted to 1.908 million people, above 1.872 million people previously, confirming the stability of the sector. The average number of applications over the past four weeks changed from 221.50 thousand to 217.75 thousand, updating the May minimum. Thus, US Fed officials are likely to continue the "dovish" course of monetary policy, since inflation dynamics are so far limited only to the real estate sector. Thus, this week, Lisa Cook, a member of the regulator's Board of Governors, said that next year the consumer price index could be 2.2%, almost reaching the target of 2.0%, which would confirm the effectiveness of the measures taken by the financial authorities.

Support and resistance levels

On the daily chart, the trading instrument is being corrected within the “expanding formation” pattern with dynamic boundaries of 1.4100–1.3300.

Technical indicators are in a buying state: the EMA oscillation range on the Alligator indicator remains wide, fast EMAs are moving away from each other, and the AO histogram is forming new correction bars, being above the transition level.

Resistance levels: 1.4020, 1.4190.

Support levels: 1.3930, 1.3780.

Trading scenarios

Long positions can be opened after the price rises and consolidates above 1.4020 with a target of 1.4190. Stop loss is 1.3920. Implementation period: 7 days or more.

Short positions can be opened after the price declines and consolidates below 1.3930 with a target of 1.3780. Stop loss is 1.4000.