Sep 14, 2020, 9:00:15 AM

USD/CAD: the pair corrects downward

Current trend

Since the opening of trading, the USD/CAD pair has been declining, trading at 1.3163.

The main driver of the instrument is USD, which has been trading for almost a week around ​​the key level for the autumn period of 93 points. However, the negative background continues to put pressure on USD. The number of new cases of COVID-19 infection continues to stably hold above 40K per day, and the number of victims from severe forest fires has reached 33 people, and according to forecasters, this week, the heat in the region will continue, which could lead to a worsening of the situation.

CAD continues to show relative stability, as indicated by improving macroeconomic indicators. Yesterday, the August industrial product price index was published, which rose by 0.1%, and the index excluding energy and oil rose by 0.3%. The increase in the indicator is largely associated with an increase in the average price for non-ferrous metals to 5.1%, which had a positive impact on Canada's exports.

Support and resistance

The global downwards channel was interrupted and the price consolidated above the resistance line, forming a local Expanding formation pattern. Soon, it may return to the broken channel resistance line, which is confirmed by the indicators. The fast EMAs of the Alligator indicator crossed, and the AO oscillator histogram forms downwards bars.

Support levels: 1.3144, 1.3040.

Resistance levels: 1.3190, 1.3260.

Trading tips

After decline or consolidation below the local support at 1.3144 sell positions with the target at 1.3040 become relevant. Stop loss is 1.3190.

After reversal and growth or consolidation above the local maximum at 1.3190, buy positions with the target at 1.3260 become relevant. Stop loss is 1.3160, below the resistance level.

Implementation period: 5 days or more.