After some growth in the beginning of the week, the USD/CAD pair fell on Wednesday and reached local lows for the week.
The fall in the pair was a result of the weakening USD amid worsening expectations of the interest rate increase in the US in September, which is the result of the People’s Bank of China market interventions aimed at the Yuan devaluation.
Furthermore, poor Jobs Opening data came out in the US on Wednesday, which fell from 5.357 million to 5.249 million. Today attention needs to be paid to the publication on Retail Sales in the US.
Support and resistance
Bollinger Bands on the daily chart is trying to turn down. MACD is falling and giving a quite strong sell signal. Stochastic is near the oversold zone trying to turn up, which could indicate the beginning of an upward correction.
The indicators recommend keeping existing short positions in the short-term or wait for a clearer signal.
Support levels: 1.2951 (local low), 1.2911, 1.2861 (29 July low), 1.2800, 1.2765, 1.2700, 1.2650 (10 July low), 1.2600.
Resistance levels: 1.3000 (local high), 1.3053, 1.3102 (24 July high), 1.3156, 1.3212 (5 August high), 1.3250.
Open long positions after the price rebound from the level of 1.2951 (with the appropriate indicators signals) with the target at 1.3100 and stop-loss at 1.2911.
Short positions can be opened after the breakdown of the level of 1.2951 with the target at 1.2861 and stop-loss at 1.3053.