Yesterday the pair renewed its highs and showed high volatility amid falling oil prices and Bank of Canada Governor Poloz speech.
In his speech, the head of the regulator stated that economy growth rates could be lower than was earlier estimated as low commodities’ prices create obstacles for the economic recovery. He also noted that problems in China have negative effects on the wold economy but expressed confidence that the Chinese government will find the way to solve that in the nearest future.
Support and resistance
Bollinger Bands on the daily chart is turning horizontally while the price range is widening from the top. At the same time, the indicator has formed a signal for correctional fall. MACD is turning down but keeping a buy signal. Stochastic is in the overbought zone trying to turn down as well.
The indicators recommend waiting for clearer trading signals.
Support levels: 1.4050 (local low), 1.4000, 1.3915, 1.3850, 1.3780 (16 December low), 1.3700, 1.3650, 1.3622.
Resistance levels: 1.4100 (local high), 1.4169 (yesterday high), 1.4200 (2003 highs).
Long positions can be opened after the breakout of the level of 1.4110 (with the appropriate indicators signals) with the target at 1.4240 and stop-loss at 1.4080. Validity – 1-3 days.
Short positions can be opened after the breakdown of the level of 1.4020 with the target at 1.3900 and stop-loss at 1.4080. Validity – 2-3 days.