Current trend

A decline in GDP, a crisis in certain sectors of economy, loose monetary policy, led by the Bank of Canada, negatively affect the Canadian dollar.

On the contrary, recent US macroeconomic releases increase the chances of an early rate hike. Despite of the fact that Nonfarm Payrolls statistics in August came in lower than it had been expected (173K vs. 220K); in June and July, the indicator had grown by 14K and 30K, respectively.

Today, banks are closed in the US and Canada due to the Labor Day celebrations. The volatility is likely to be over during the European session.

Support and resistance

A short downward correction to the levels of 1.3225 (ЕМА50 on the 4-hour chart), 1.3200, 1.3175, 1.3150 (ЕМА144) is possible. Only if the pair breaks down 1.3090 (ЕМА200 on the 4-hour chart), it may reach the level of 1.3000 (ЕМА50 on the daily chart).

On the 4-hour chart, OsMA and Stochastic indicate a short-term downward correction. On the daily chart, they are still giving sell signals as well.

The breakdown of 1.2800 would allow the pair to decline towards 1.2650, 1.2540, 1.2290 (23.6% Fibonacci) in the medium run.

Support levels: 1.3000, 1.3090, 1.3100, 1.3150, 1.3175, 1.3200, 1.3225.

Resistance levels: 1.3300, 1.3350.

Trading tips

Long positions are more preferable, however, it is recommended to wait for the correction to finish.

It is possible to place pending buy orders from the level of 1.3210, 1.3180, 1.3150 with targets at 1.3250, 1.3300 and stop-loss at 1.3080.

USD/CAD: Labor Day and correction

USD/CAD: Labor Day and correction

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