Review and dynamics
OPEC’s decision to reduce oil production has caused the rise in oil prices by 16%. The Canadian dollar, is a commodity currency, which is strongly correlated with the oil prices, has also grown.
After the Italian referendum last Sunday and the US labor market data of last Friday, the USD has sharply grown and the financial markets started new week with a gap.
The pair USD/CAD remains in the ascending channel on the daily chart above the strong support levels of 1.3180 (ЕМА200 on the daily chart) and 1.3100 (Fibonacci 38.2% after the rise from the beginning of July 2014 at the level of 1.0650). Lower limit of the ascending channel on the daily chart is near the level of 1.3100. The upper limit of the channel is near 1.3680 (Fibonacci 23.6%).
On the daily and weekly charts the pair USD/CAD is in the ascending channels, while on the 4-hour chart there is a new descending channel with the lower limit near the level of 1.3250. Short-term support level of 1.3380 (ЕМА200 on 4-hour chart) has been broken, and the pair is going down to support level of 1.3180 (ЕМА200 on the daily chart).
If the price breaks down support level of 1.3100, downtrend may continue and the pair may go down to support levels of 1.2840 and 1.2760 (lows of August).
Breakdown of support level of 1.2760 may trigger further decline in the pair USD/CAD with the targets of 1.2635 (Fibonacci 50.0%) and 1.2525 (annual lows).
Uptrend in the pair may resume if the price goes up above the level of 1.3380. Upper limits of the ascending channels on the weekly and daily charts will be near the level of 1.3680.
After breakout of this level and further growth downward correction may finish and uptrend in the pair USD/CAD will continue.
Support levels: 1.3250, 1.3200, 1.3180, 1.3100, 1.3085, 1.2840, 1.2760 and 1.2635.
Resistance levels: 1.3380, 1.3555 and 1.3680.
Buy Stop: 1.3360. Stop-Loss: 1.3320. Take-Profit: 1.3380, 1.3555 and 1.3680.
Sell on the market. Stop-Loss: 1.3350. Take-Profit:1.3250, 1.3200, 1.3165 and 1.3100.
In the ascending channel
Breakout of 1.3380