Last week, the Canadian Dollar strengthened to its highs since the beginning of December 2015. The USD/CAD pair decline amid weak macroeconomic statistics on labour market and Services PMI, released in the US.
Data on Building Permits is due in Canada today. The indicator is expected to grow to 5.6% that might strengthen the CAD. Moreover, Deputy Governor of the Bank of Canada Timothy Lane will give a speech in Montreal. Market reaction will depend on prospects of monetary policy in the country.
Support and resistance
On the daily chart, the pair is trading between the middle and the lower MAs of Bollinger Bands. MA100 and MA144 are below the current price and directed horizontally. The MACD histogram is in the negative zone; its volumes are growing gradually. ADX is directed horizontally; the DI lines are falling.
Support levels: 1.3835, 1.3711, 1.3633, 1.3500, 1.3348, 1.3035.
Resistance levels: 1.3944, 1.3981, 1.4068, 1.4116, 1.4182, 1.4287, 1.4334, 1.4499, 1.4691.
Long positions can be opened from the level of 1.3944 with targets at 1.3980, 1.4060 and stop-loss at 1.3900.
Short positions can be opened from the level of 1.3830 with the target at 1.3710 and stop-loss at 1.3900.
Validity – 1-3 days.