USD/CAD: the pair is showing mixed dynamics

Current trend

US dollar showed slight reduction against Canadian dollar yesterday, but managed to updated a local maximum of October 25. Certain pressure on it was put by the data on Markit services PMI that were released yesterday and appeared to be worse than expected by analysts. CAD, it turn, received certain support after the release of export and import statistics.

The volumes of export from Canada in October grew from 43.30 bln to 44.46 bln CAD which was a bit higher that average outlooks. The volumes of export in the same period dropped from 46.67 bln to 45.93 bln CAD causing considerable reduction of trading balance deficiency from 3.36 bln to 1.47 bln CAD (while it was expected to reach -2.70 bln).

Today investors will focus their attention on the decision of the Bank of Canada that is scheduled for 17:00 (GMT+2). Analysts don’t expect the rate to move away from the current level of 1%, but the follow-up statement may contain important comments about the future policy of the regulator.

Support and resistance levels

Bollinger Bands in D1 chart show flat dynamics. The price range is widening. MACD histogram still preserves a stable downward trend with a sell signal (the histogram is below the signal line). Stochastic has reached minimal values indicating that the instrument is oversold in the short term and reversed to growth.

Resistance levels: 1.2700, 1.2735, 1.2769, 1.2800.

Support levels: 1.2664, 1.2621, 1.2600.

Trading tips

Long positions may be opened after breaking through the level of 1.2700 with targets at 1.2750, 1.2769 and stop-loss at 1.2670. The period of implementation is 2-3 days.

Moving away from the level of 1.2700 as resistance may be a signal for the beginning of corrective sales with targets at 1.2621, 1.2600 and stop-loss at 1.2740. The period of implementation is 2-3 days.

US Dollar vs Canadian

Buy Sell Spread
1.28014 1.27993 21

Scenario

Timeframe Day’s Range
Recommendations BUY STOP
Entry Point 1.2710
Take Profit 1.2750, 1.2769
Stop Loss 1.2670
Support levels 1.2600, 1.2621, 1.2664, 1.2700, 1.2735, 1.2769, 1.2800

Alternative scenario

Recommendations SELL LIMIT
Entry Point 1.2700
Take Profit 1.2621, 1.2600
Stop Loss 1.2740
Support levels 1.2600, 1.2621, 1.2664, 1.2700, 1.2735, 1.2769, 1.2800

USD/CAD: the pair is showing mixed dynamics

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