The US Dollar is declining against commodity currencies amid an upward correction in oil prices.
When US Department of Energy reported a decline in US crude oil storage, oil futures were up during the Asian session. Nevertheless, oil prices will continue being under pressure due to excess in US crude inventories and oversupply of the global oil market. Therefore, the CAD will be affected as well.
The USD/CAD pair is likely to continue growing in the medium term. Canada's economy is facing difficulties amid a continuous fall in commodity prices while the upcoming tightening of US monetary policy supports the USD.
Support and resistance
The USD/CAD pair is trading within an ascending channel on the weekly chart with the upper border above the level of 1.3800.
On the daily and weekly charts, OsMA and Stochastic indicators recommend long positions. However, on the 4-hour chart, they have started giving sell signals. The pair is strongly overbought, therefore, a short-term correction is possible and might reach the levels of 1.3490 (EMA144 on the hourly chart), 1.3460 (EMA200 on the hourly chart and EMA50 on the 4-hour chart) and 1.3400 (the lower border of an upward channel on the 4-hour chart).
Support levels: 1.3550, 1.3490, 1.3460, 1.3425, 1.3400.
Resistance levels: 1.3600, 1.3650, 1.3700.
Short positions can be opened below the level of 1.3550 with targets at 1.3460, 1.3400 and stop-loss at 1.3580.
Long positions can be opened from the level of 1.3580 with targets at 1.3620, 1.3650 and stop-loss at 1.3540.