Review and dynamics
The pair USD/CAD has been declining for the fifth consecutive, reflecting the trend on the USD against the commodity prices and commodity currencies.

The pair USD/CAD has returned to the key support level of 1.3100 (Fibonacci 38.2% to the rise in the pair since the beginning of July 2014 and the level of 1.0650) and 1.3085 (ЕМА200, ЕМА144 on the daily chart). On the daily and weekly charts the pair USD/CAD is the ascending channel. The indicators OsMA and Stochastic give signals for short positions.

The situation is interesting. The level of 1.3085 is a balance line to which the price returns, moving in the range of 1.3300 and 1.2840 since the beginning of July.

In the beginning of this month the pair USD/CAD rebounded from strong support levels of 1.3100 and 1.3085, but failed to go above the level of 1.3300. As long as the pair remains above these levels, uptrend will continue.

Our opinion
Further movement in the pair USD/CAD will depend on the decisions of the Central Banks of the USA and Canada and oil prices.

On weekly and daily charts the upper limit of the ascending channels is near the level of 1.3300. In case of breakout of this level the pair will go up to the level of 1.3680 (Fibonacci 23.6%), which is a target in the medium-term.

AS an alternative scenario the pair can break down support level of 1.3085 and continue to decline to support level of 1.2840 and 1.2760 (lows of August). The lower limit of the channel on the daily chart is near these levels.

Breakdown of support level of 1.2760 will show that downtrend prevails with the nearest target of 1.2635 (Fibonacci 50.0%) and 1.2525 (annual lows).

We assume that the pair USD/CAD will remain in the range of 1.3300 – 1.2840 until the end of this year, when interest rate decision of the US Fed will be made. The medial line is at 1.3085 and 1.3100.

Support levels: 1.3100, 1.3085, 1.2840, 1.2760, 1.2635 and 1.2525.
Resistance levels: 1.3250, 1.3300, 1.3400 and 1.3680.

Trading tips
Buy Stop: 1.3130. Stop-Loss: 1.3080. Take-Profit: 1.3250 and 1.3300.
Sell Stop: 1.3050. Stop-Loss: 1.3110. Take-Profit: 1.3000, 1.2840 and 1.2760.

In the ascending channel
In the ascending channel

At support level of 1.3085
At support level of 1.3085

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