Current trend

During trading this week, the USD/CAD pair reached the resistance level of 1.3539 but could not consolidate above it and began to decline to the area of 1.3472 amid the publication of positive statistics from Canada.

Thus, in December, the retail sales, which records all goods sold by retail outlets based on a sample of retail stores of different types and sizes and is an important indicator of consumer spending, increased by 0.9% MoM, above the forecast of 0.8% and the previous value of 0.0%, and by 2.9% relative to expectations of 2.5% and the previous value of 1.8% – YoY. The core figure adjusted from –0.4% to 0.6%. After the publication of the data, the quotes for the USD/CAD pair dropped to the support level of 1.3434 but then, most of the lost positions were restored.

However, the trading instrument is in a long-term downward trend. It is better to open short positions from the upper border of the key range 1.3539–1.3434 and long positions from the lower limit. After overcoming 1.3539 and consolidating above, the movement will continue with the target at 1.3607, and in case of consolidation below 1.3434, a decline to the area of 1.3380 is expected.

The medium-term trend is upward: the price tested zone 2 (1.3552–1.3533), after which a correction with the target at the trend border of 1.3404–1.3386 began. So, long positions with the target in zone 2 are relevant, and after its breakout – in zone 3 (1.3738–1.3719).

Support and resistance

Resistance levels: 1.3539, 1.3607.

Support levels: 1.3434, 1.3380, 1.3316.

Trading tips

Long positions may be opened from 1.3434 with the target at 1.3539 and stop loss 1.3404. Implementation time: 9–12 days.

Short positions may be opened below 1.3404 with the target at 1.3316 and stop loss 1.3435.