Last week, the Canadian Dollar grew notably, and the USD/CAD pair lost more than 450 points. Data on inflation, released in the US, confirmed the forecast, while Initial Jobless Claims were up to 293K, the highest for 11 months. Moreover, the pair gained support when the Bank of Canada decided to keep its interest rate unchanged at 0.5%. However, the Canadian Dollar is under pressure from negative dynamics of Consumer Price Index.
Support and resistance
On the daily chart, the price is trading in the area of the middle MA of Bollinger Bands. MA50, MA100 and MA144 are below the current price and directed down that indicates an upward trend in the pair. MACD histogram is in the positive zone, its volumes are falling gradually. ADX indicator is declining, DI lines are directed down.
Support levels: 1.4116, 1.4068, 1.3835, 1.3633, 1.3538, 1.3348, 1.3035, 1.2846.
Resistance levels: 1.4182, 1.4274, 1.4346, 1.4499, 1.4691.
Short position can be opened from the level of 1.4110 with targets at 1.4068, 1.4000 and stop-loss at 1.4150.
Long positions can be opened after the consolidation above the level of 1.4180 with the target at 1.4270 and stop-loss at 1.4120.
Validity – 2-3 days.