Today at 5 pm (GMT+2) the Bank of Canada will make its Interest Rate Decision. According to forecasts, the rate is going to remain unchanged at 0.5% though regulator’ officials loudly supported the idea of further monetary policy easing before.
At the same time, yesterday’s data on the API Weekly Crude Stock Change showed an increase in oil reserves of 1.6 million barrels. After the news, January Brent crude oil futures fell to $44.30 per barrel. Nevertheless, oil is going to remain under pressure due to excess of the supply on the market, which will continue pressuring the CAD as it is highly correlated with oil prices.
Today attention needs to be paid to speeches by US Fed officials and data on the ADP Employment Change for November.
Support and resistance
On the weekly chart, the pair is moving along an ascending channel with the upper border above the level of 1.3600.
As long as the price remains above the key support level at 1.2965 (EMA144, 38.2% Fibonacci correction) long positions are preferable.
On the 4-hour, daily and weekly charts, OsMA and Stochastic recommend long positons.
Support levels: 1.3310, 1.3285, 1.3240, 1.3215, 1.3140.
Resistance levels: 1.3400, 1.3450.
Long positions can be opened from the level of 1.3400 with targets at 1.3450, 1.3470 and stop-loss at 1.3380.
Short positions can be opened below the level of 1.3370 with targets at 1.3285, 1.3250 and stop-loss at 1.3390.