Having declined at the beginning of the week, on Tuesday, the American currency managed to strengthen against the Canadian dollar amid controversial macroeconomic statistics. Despite some weakness of the USD, the USD/CAD pair is trading close to record highs, indicating that the CAD is definitely lacking support.
Nevertheless, on Tuesday, Canada released strong GDP statistics for June. After a 0.2% slowdown, the country's economy grew by 0.5% which is 0.3% above the forecast. On a year-on-year basis, GDP in the second quarter declined by 0.5% which is twice as good as was expected.
Support and resistance
Bollinger Bands indicator on the daily chart continues moving up, while the price range is narrowing actively. MACD is trying to keep the downward trend and giving a sell signal. It is recommended to wait for a clearer situation.
Having turned up at the border of the oversold zone, Stochastic is growing now, thus, indicating that the price may come back to the local highs.
Support levels: 1.3212, 1.3156, 1.3100 (near local lows), 1.3053, 1.3000, 1.2951 (12 August low), 1.2911.
Resistance levels: 1.3260 (2 September local high), 1.3300, 1.3352 (25 August high), 1.3400.
After the breakout and consolidation above the level of 1.3260, open long positions with the target at 1.3352 and stop-loss at 1.3212.
If the price rebounds down from the level of 1.3260, open short positions with targets at 1.3156, 1.3100 and stop-loss at 1.3300.