Current trend

USD strengthened against CAD in view of comments by Fed head Jerome Powell, who spoke on Wednesday before the Financial Services Committee of the House of Representatives of the US Congress, and the Beige Book data. Powell noted that now the balance of the Fed reaches 4.5 trillion dollars, however, the program of bonds redemption proved its effectiveness, and there is no reason to drastically reduce the purchase yet. The process of normalizing the balance can take up to four years. As for the key US economic problems, he named the growth rates of public debt, exceeding the growth of GDP. In general, investors remain confident that the US regulator will raise interest rates this year two more times.

Published on Wednesday evening, Fed's Beige Book reflected a moderate or rapid economic growth in 10 of the 12 US regions, which gave investors the hope of continued sustainable economic growth in the US, even in the face of growing trade disputes.

USD was supported by a decrease in Initial Jobless Claims to 207K. CAD was pressured by a negative impact of ADP employment report.

Today, the market expects data on retail sales in and on the base consumer price index from the BoC. High volatility is expected.

Support and resistance

On the H4 chart, we can see a downward correction. The instrument is trading between the upper and middle lines of Bollinger Bands; the price range is widened. MACD histogram is in the positive area. The signal line is crossing the histogram from below giving a signal to buy.

Support levels: 1.3250, 1.3220, 1.3160, 1.3130, 1.3100, 1.3080, 1.3050.

Resistance levels: 1.3277, 1.3300, 1.3340, 1.3355, 1.3400.

Trading tips

Short positions may be opened from the current level with the target at 1.3200 and stop loss at 1.3277.

Long positions may be opened from 1.3300 with the target at 1.3350 and stop loss at 1.3270.

Implementation time: 1-3 days.

US Dollar vs Canadian

BuySellSpread
1.339061.33786120

Scenario

TimeframeDay's Range
RecommendationsSELL
Entry Point1.3245
Take Profit1.3200
Stop Loss1.3277
Support levels1.3050, 1.3080, 1.3100, 1.3130, 1.3160, 1.3220, 1.3250, 1.3277, 1.3300, 1.3340, 1.3355, 1.3400

Alternative scenario

RecommendationsBUY STOP
Entry Point1.3300
Take Profit1.3350
Stop Loss1.3270
Support levels1.3050, 1.3080, 1.3100, 1.3130, 1.3160, 1.3220, 1.3250, 1.3277, 1.3300, 1.3340, 1.3355, 1.3400
USD/CAD: general review

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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