While the US economy is growing steadily, Canada's economy is facing risks due to a decline in oil prices and a slowdown in the GDP. The Bank of Canada aims to continue its loose monetary policy. As long as oil prices are lowering, the USD/CAD pair will keep strengthening.
Support and resistance
Yesterday, when the Federal Reserve interest rate decision was announced, the USD/CAD pair fell by 100 points, but later, after a press conference was given by the Fed's Chair Janet Yellen, the price grew back to the level of 1.3180, from which a decline started today. The pair broke down the strong support levels of 1.3190 (ЕМА144), 1.3145 (ЕМА200) on the 4-hour chart and is heading towards the support level of 1.3065 (ЕМА50 on the daily chart).
If the decline continues, the pair may reach the levels of 1.2975, 1.2920. If a short-term upward correction in oil prices finishes, an upward trend in the USD/CAD pair is likely to resume.
OsMA and Stochastic indicators on the 4-hour and daily charts recommend short positions.
Support levels: 1.2920, 1.2975, 1.3000, 1.3065.
Resistance levels: 1.3145, 1.3190, 1.3300, 1.3350.
Long positions can be opened above the level of 1.3070 with targets at 1.3110, 1.3150 and stop-loss at 1.3045.
Short positions become valid if the level of 1.3040 is broken down with targets at 1.3020, 1.3000 and stop-loss at 1.3065.