On Tuesday, the USD/CAD pair was growing actively and managed to consolidate above the level of 1.3600 for a while. Last time the price reached this level only in summer 2004.
Though the majority of currencies grew against the US Dollar at the end of the previous week, the CAD has been failing to consolidate for quite a long time.
This negative dynamics might be a result of labor market statistics for November, released on Friday in Canada. Net Change in Employment indicated a fall by 35.7K against a growth by 44.4K in the previous month. Unemployment Rate was up by 0.1% to 7.1%. Moreover, both Exports and Imports declined.
Support and resistance
Bollinger Bands indicator on the daily chart is growing moderately. The price range is widening actively, but the price remains out of its borders. MACD keeps its strong upward trend. Stochastic is in the overbought zone and trying to turn down.
According to Bollinger Bands and Stochastic indicators, a downward correction is possible in the short term.
Support levels: 1.3554, 1.3500, 1.3457, 1.3407 (2 December high), 1.3370, 1.3300, 1.3265, 1.3224 (12 November low), 1.3164, 1.3100.
Resistance levels: 1.3622 (8 December high), 1.3650, 1.3700.
Long positions can be opened if the price turns up and breaks out the level of 1.3615 (with appropriate indicators signals) with targets at 1.3700, 1.3730 and stop-loss at 1.3580. Validity – 2-3 days.
A likelier scenario is the breakdown of the level of 1.3550 and continuation of a downward correction. In this case, target levels will be 1.3480, 1.3450 and stop-loss should be set at 1.3590. Validity – 1-3 days.