Current trend

Last week, the USD/CAD pair surpassed 1.3539 and is preparing to continue growing with the target at 1.3670.

Last week, December statistics on Canada’s gross domestic product (GDP) were published: the indicator reflected zero dynamics MoM, worse than the forecast of 0.2%, and adjusted from 0.46% to 0.93% YoY. In the fourth quarter, the economy stabilized at 0.2%, down from –0.1%, below experts’ expectations of 0.3%. According to the report, although consumer spending rose in the quarter, the per capita value adjusted downward amid strong population growth. The preliminary estimate for January suggests real GDP strengthened by 0.4%.

The American dollar is supported by the price index of personal consumption expenditures, which in January amounted to 0.3% MoM and reached 2.4% YoY, coinciding with the forecast, which will likely lead to a change in the timing of the US Federal Reserve’s transition to the “dovish” rhetoric. The February labor market report will be published on Friday: according to preliminary estimates, nonfarm payrolls will decrease from 353.0K to 200.0K, and the average hourly wage for the same period – from 4.5% to 4.4%.

Support and resistance

The long-term trend remains downward with the border at 1.3607: while the price is trading below it, short positions are relevant. Last week, the quotes crossed the level of 1.3539 and approached the trend border: if 1.3607 is tested this week, short positions with the target at 1.3463 are relevant.

The medium-term trend is upward: the asset has overcome zone 2 (1.3552–1.3533), and the next target is zone 3 (1.3738–1.3719), and the key support has shifted to the area 1.3423–1.3405, after correction to which long positions within the trend with the target are relevant at last week’s high 1.3595.

Resistance levels: 1.3607, 1.3670.

Support levels: 1.3462, 1.3434.

Trading tips

Short positions may be opened from 1.3607, with the target at 1.3463 and stop loss 1.3650. Implementation time: 9–12 days.

Long positions may be opened above 1.3650, with the target at 1.3764 and stop loss 1.3600.