Current trend

Against the stabilization of the American dollar, the USD/CAD pair is correcting around 1.3692.

Tomorrow, the Bank of Canada will hold a monetary policy meeting. The officials plan to keep the interest rate at 5.00%. Key macroeconomic statistics allow the regulator to refuse to increase borrowing costs since the September consumer price index fell from 4.0% to 3.8% amid falling prices for durable goods and food products, the prices of which form long-term inflation. The department’s rhetoric will help reduce pressure on the economy by supporting the national currency.

The American dollar has reached 105.000 in the USD Index, and the negative dynamics may continue against today’s macroeconomic statistics: the business activity index in the manufacturing sector is projected to adjust from 49.8 points to 49.5 points, and services PMI – from 50.1 points to 49.8 points, which confirms the slowdown in the US economy and puts pressure on the country’s currency.

Support and resistance

On the daily chart, the trading instrument is correcting within a local ascending corridor with dynamic boundaries of 1.3860–1.3620, moving toward the resistance line.

Technical indicators maintain a buy signal: the EMA fluctuation range on the Alligator indicator is expanding, and the AO histogram is forming corrective bars above the transition level.

Resistance levels: 1.3716, 1.3860.

Support levels: 1.3600, 1.3450.

Trading tips

Long positions may be opened after the price rises and consolidates above 1.3716 with the target at 1.3860. Stop loss – 1.3650. Implementation period: 7 days or more.

Short positions may be opened after the price declines and consolidates below 1.3600 with the target at 1.3450. Stop loss – 1.3700.