Despite a slight growth of oil price during the Asian session in anticipation of the next reduction in the US oil reserves, the CAD is falling against the USD. American currency is under the pressure from possible US interest rate hike. The CAD, on the other hand, is been negatively affected by the country’s drop of 2.1% in manufacturing for April and declining price of oil. The head of the Bank of Canada Stephen Poloz last week noted that the financial situation remains quite uncertain due to the oil price, household indebtedness and high house prices.
Today’s important news are the investment figures in Canadian securities and the US building permits and housing starts.
Support and resistance
From 10 June the pair remains near a strong support level of 1.2290 (Fibonacci 23.6%) and on the EMA144 and EMA200 lines (1.2230). On the 4-hour chart, OsMA and Stochastic are uncertain, however, on the daily chart they signal opening long positions.
Support levels: 1.2290, 1.2255, 1.2200, 1.2120, 1.1975.
Resistance levels: 1.2330, 1.2365, 1.2400, 1.2455, 1.2525.
Opening long positions is recommended from 1.2290 with targets at 1.2365, 1.2400, 1.2455, and 1.2525. Short positions can be opened after the breakdown of 1.2290 level (Fibonacci 23.6%) with targets at 1.2255, 1.2200, and 1.2170.