Current trend

On Thursday, the pair USD/CAD continued to fall, closing below the level of 1.2300. The reason for the price decrease was the growth in the index of business activity in the manufacturing sector of Canada: the figure was 55.9 points, exceeding the forecast of 54.8 points. The rise in oil prices also became a favorable factor for the Canadian dollar.

At the same time, in the US, data on the change in the number of applications for unemployment benefits were controversial, which did not support the USD. The number of secondary applications amounted to 1.953 million, surpassing the forecast. The number of initial applications for benefits amounted to 230K, which is 8K lower than the forecast value. The US dollar was also affected by a decline in labor productivity in the fourth quarter of 2017, the indicator fell by 0.1%, while the growth was expected to be 1%.

The main event of today will be the data on unemployment in the US and Non-Farm Payrolls (15.30 GMT+2). The expected increase in wages, combined with an increase in NFPR will be a favorable factor for USD, and the fall in the pair USD/CAD may slow down.

Support and resistance

On the 4-hour chart there is a correction of the downward movement, the pair is growing in the direction of the middle line of the "Bollinger Bands". The MACD histogram is in the negative area, keeping the signal to sell.

Support levels: 1.2255, 1.2200.

Resistance level: 1.2305, 1.2330, 1.2370, 1.2400.

Trading tips

Long positions can be opened at the level of 1.2310 with the target of 1.2370, and the stop loss at 1.2280.

Short positions will become relevant below 1.2250 with a target of 1.2200 and a stop loss at 1.2280.

Implementation period: 1-3 days.

US Dollar vs Canadian

BuySellSpread
1.343171.3426255

Scenario

TimeframeDay's Range
RecommendationsBUY STOP
Entry Point1.2310
Take Profit1.2370
Stop Loss1.2280
Support levels1.2200, 1.2255, 1.2305, 1.2330, 1.2370, 1.2400

Alternative scenario

RecommendationsSELL STOP
Entry Point1.2250
Take Profit1.2200
Stop Loss1.2280
Support levels1.2200, 1.2255, 1.2305, 1.2330, 1.2370, 1.2400
USD/CAD: general analysis

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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