Current trend

The USD/CAD pair still continues its upward trend, but the growth is slowing down. On Monday, the price did not managed to hit new local highs from its Friday’s level near 1.4000 that, coupled with a decline in trading activity, might indicate a possibility of correctional dynamics.

Not much macroeconomic statistics are released this week, and traders are likely to concentrate on taking profits. However, Personal Income, Personal Spending and Durable Goods Orders data for November are due on Wednesday in the US and worth noting. Attention also needs to be paid to Canada’s GDP and Retail Sales indicators for October.

Support and resistance

Bollinger Bands indicator on the daily chart is growing actively while the price range is narrowing gradually down. The volumes of MACD histogram have fallen, but the indicator is still giving a buy signal. Stochastic is in the overbought zone.

A downward correction might develop in the short-term. The indicators recommend waiting for clearer trading signals.

Support levels: 1.3900, 1.3854, 1.3780, 1.3700, 1.3650, 1.3622, 1.3554 (10 December level).

Resistance levels: 1.4000 (near 18 December low), 1.4050, 1.4100.

Trading tips

Long positions can be opened after the breakout of the level of 1.4000 (with appropriate indicators signals) with the target at 1.4100 and stop-loss at 1.3940. Validity – 2-3 days.

As an alternative scenario, a downward correction might be considered in the short term. Short positions can be opened after the breakdown of the level of 1.3900 with the target at 1.3780 and stop-loss at 1.3950. Validity – 3-4 days.

USD/CAD: pair in upward trend

USD/CAD: pair in upward trend

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