Current trend
The USD/CAD pair is actively declining, trading around 1.3400.
Yesterday, the Bank of Canada left the interest rate at 4.50% and raised the forecast for economic growth for the current year from 1.0% to 1.4%, adjusting preliminary estimates of the likelihood of a recession. The head of the regulator, Tiff Macklem, noted that a pause in the cycle of tightening monetary policy is necessary to assess the results of the measures already taken, and it will last until inflation starts to decline rapidly following the forecast – to 3.0% by the middle of this year. and up to 2.0% by the end of the next. A return to hawkish rhetoric is possible if necessary but bank officials say the interest rate hike already enacted is having the desired effect, slowing the economy and lowering inflation.
Against this background, the trading instrument is trying to consolidate below the strong support level of 1.3450, after which a correction to a long-term uptrend with the target at 1.3250 is possible, in case of holding which it is worth considering long positions of the asset with the target at 1.3500. After the consolidation above 1.3450, the uptrend is likely to continue towards 1.3700.
The medium-term trend is downward, and the quotes are falling towards zone 2 (1.3350–1.3327), after which zone 3 (1.3109–1.3087) will become the sell target. New sales within the trend should be considered on the correction to the key resistance 1.3683–1.3658 with the first target at the low of the current week around 1.3400.
Support and resistance
Resistance levels: 1.3700, 1.3830, 1.3960.
Support levels: 1.3250, 1.2970.
Trading tips
Long positions may be opened above 1.3480 with the target at 1.3700 and stop loss 1.3375. Implementation period: 9–12 days.
Short positions may be opened below 1.3375 with the target at 1.3170 and stop loss around 1.3450.
The USD/CAD pair is actively declining, trading around 1.3400.
Yesterday, the Bank of Canada left the interest rate at 4.50% and raised the forecast for economic growth for the current year from 1.0% to 1.4%, adjusting preliminary estimates of the likelihood of a recession. The head of the regulator, Tiff Macklem, noted that a pause in the cycle of tightening monetary policy is necessary to assess the results of the measures already taken, and it will last until inflation starts to decline rapidly following the forecast – to 3.0% by the middle of this year. and up to 2.0% by the end of the next. A return to hawkish rhetoric is possible if necessary but bank officials say the interest rate hike already enacted is having the desired effect, slowing the economy and lowering inflation.
Against this background, the trading instrument is trying to consolidate below the strong support level of 1.3450, after which a correction to a long-term uptrend with the target at 1.3250 is possible, in case of holding which it is worth considering long positions of the asset with the target at 1.3500. After the consolidation above 1.3450, the uptrend is likely to continue towards 1.3700.
The medium-term trend is downward, and the quotes are falling towards zone 2 (1.3350–1.3327), after which zone 3 (1.3109–1.3087) will become the sell target. New sales within the trend should be considered on the correction to the key resistance 1.3683–1.3658 with the first target at the low of the current week around 1.3400.
Support and resistance
Resistance levels: 1.3700, 1.3830, 1.3960.
Support levels: 1.3250, 1.2970.
Trading tips
Long positions may be opened above 1.3480 with the target at 1.3700 and stop loss 1.3375. Implementation period: 9–12 days.
Short positions may be opened below 1.3375 with the target at 1.3170 and stop loss around 1.3450.