Current trend

Against the stabilization of the American dollar, the USD/CAD pair is correcting around 1.3627.

Analysts expect Canada’s September CPI to increase 0.1% from 0.4% a month earlier, which could keep the rate at 4.0% YoY. The core rate will remain at 3.3%, and investors cannot yet be confident that the Bank of Canada will begin to cut interest rates, easing pressure on the economy.

The American dollar is holding around 106.000 in the USD Index, awaiting the emergence of new drivers, which could be today’s macroeconomic reports: analysts expect the core retail sales index to decline from 0.6% to 0.2% and the retail sales to fall from 0.6 % to 0.3%. At the same time, the September volume of industrial production may also adjust from 0.4% to 0.1%, bringing the figure below zero YoY compared to local growth of 0.25% in August.

Support and resistance

On the daily chart, the trading instrument is moving within a local ascending corridor with dynamic boundaries of 1.3780–1.3570 to the resistance line.

Technical indicators maintain a buy signal, which has weakened against the passed corrections: the EMA fluctuation range on the Alligator indicator is directed upwards, and the AO histogram forms correctional bars above the transition level.

Resistance levels: 1.3680, 1.3780.

Support levels: 1.3570, 1.3450.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.3680 with the target at 1.3780. Stop loss – 1.3620. Implementation period: 7 days or more.

Short positions may be opened after the price declines and consolidates below 1.3570 with the target at 1.3450. Stop loss – 1.3620.