The pair USD/CAD updated a local maximum on Wednesday, September 20, and has been trading around zero since then reacting to a big number of macroeconomic releases and yet another wave of tension in the geopolitical situation in the end of the current week.
Moreover, on Friday, September 22, investors are waiting for the release of statistics on consumer inflation in Canada in August at 14:30 (GMT+2). Analysts expect the data to be strong. In particular CPI is expected to increase by 0.2% MoM and 1.5% YoY against the previous growth by 0.0% and 1.2% respectively.
September PMI statistics from the USA is due on Friday at 15:45 (GMT+2). However, the investors may pay less attention to it due to the tightening of the situation around North Korea.
Support and resistance
On the D1 chart Bollinger Bands have reversed horizontally. The price range is moderately narrowing. MACD indicator is growing preserving a stable buy signal (the histogram is above the signal line). Stochastic is reversing downwards, moving away from the overbought area.
Resistance levels: 1.2366, 1.2412, 1.2439, 1.2500.
Support levels: 1.2300, 1.2238, 1.2194, 1.2129.
Long positions may be opened after breaking through the level of 1.2366 with targets at 1.2470, 1.2500 and stop-loss at 1.2300. The period of implementation is 2-3 days.
The breakdown of the level of 1.2300 may serve as a signal to the beginning of sales with targets at 1.2200, 1.2150 and stop-loss at 1.2366. The period of implementation is 2-3 days.
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