Current trend

On Friday, USD declined against CAD after the release of mixed data from the US market. Nonfarm Payrolls in June was better than expected but lower than the previous value and amounted to 213K. Unemployment rate rose from 3.8% to 4.0%. The deterioration in the labor market and trade wars can cause FOMC members to slow down the interest rate increases hike. Also, the official start of the China-US trade war contributed to the weakening of USD: on Friday, US 25% tariffs on 818 Chinese goods worth $34 billion entered into force.

The data for Canada were also contradictory. The rate was supported by Net Change in Employment growth to 31.8 and an increase in Participation rate to 65.5%. However, Unemployment Rate increased by 0.2% and reached 6%, which indicates a lack of growth in the Canadian labor market and is a negative factor for the currency.

Support and resistance

As there is lack of significant macroeconomic releases today, it is better to focus on the technical indicators’ readings. On the 4-hour chart, the instrument is falling along the lower border of Bollinger bands, the price range is widened. MACD histogram is in the negative area, keeping the signal to the opening of short positions.

Resistance levels: 1.3130, 1.3160, 1.3200.

Support levels: 1.3080, 1.3050, 1.3025, 1.3000.

Trading tips

Short positions can be opened at the level 1.3080 with the target at 1.3025. Stop loss is 1.3110.

Long positions can be opened from the level of 1.3140 with the target at 1.3200 and stop loss 1.3110.

Implementation period: 1–3 days.

US Dollar vs Canadian

BuySellSpread
1.313171.3129225

Scenario

TimeframeDay's Range
RecommendationsSELL
Entry Point1.3082
Take Profit1.3025
Stop Loss1.3110
Support levels1.3000, 1.3025, 1.3050, 1.3080, 1.3130, 1.3160, 1.3200

Alternative scenario

RecommendationsBUY STOP
Entry Point1.3140
Take Profit1.3200
Stop Loss1.3110
Support levels1.3000, 1.3025, 1.3050, 1.3080, 1.3130, 1.3160, 1.3200
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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