Current trend

During the Asian session, the USD/CAD pair consolidated near 1.3675 and the end of November’s highs, renewed yesterday, against the strengthening of the American dollar after the inflation statistics release.

Thus, in March, the consumer price index increased by the previous 0.4%, contrary to forecasts of a slowdown to 0.3% MoM, and rose from 3.2% to 3.5% YoY, ahead of expectations of 3.4%. The core value excluding food and energy adjusted by 0.4% MoM and 3.8% YoY, as in the previous period, above the forecast of slowdown to 0.3% and 3.7%. Against these data, US Fed officials may refuse to cut interest rates by 25 basis points during the June meeting, and more and more analysts expect the start of monetary easing to be postponed, with some experts suggesting that it may be delayed until the end of the year.

Meanwhile, the Bank of Canada kept borrowing costs at 5.00% for the sixth time, emphasizing that further decisions on the issue will be made solely based on the current economic situation. The head of the department, Tiff Macklem, noted that inflation was still high but the core indicator, excluding the most volatile goods, had a steady tendency to slow down, so the expected interest rate adjustment in June was still possible.

Support and resistance

On the daily chart, Bollinger Bands are growing slightly: the price range is expanding but not as fast as the “bullish” sentiment develops. The MACD indicator grows, keeping a strong buy signal: the histogram is above the signal line. Stochastic is quickly approaching its highs, indicating that the American dollar may become overbought in the ultra-short term.

Resistance levels: 1.3700, 1.3750, 1.3800, 1.3853.

Support levels: 1.3650, 1.3616, 1.3580, 1.3550.

Trading tips

Short positions may be opened after a breakdown of 1.3650 downwards, with the target at 1.3550. Stop loss – 1.3700. Implementation time: 2–3 days.

Long positions may be opened after a rebound from 1.3650 and a breakdown of 1.3700 upwards, with the target at 1.3800. Stop loss – 1.3650.