Current trend

The USD/CAD pair rose to 1.3775 after the Canadian gross domestic product (GDP) release yesterday, which reflected the insufficient pace of recovery of the national economy. In February, the preliminary figure reached 0.2% MoM, below the forecast of 0.3%, the previous value was corrected from 0.6% to 0.5%, and the March value was 0.0%, putting pressure on the Canadian dollar.

Additional support for the American currency may be provided by data on changes in nonfarm employment due on Friday at 14:30 (GMT 2). According to preliminary estimates, the April figure will be 243.0K, leading to an increase in the USD/CAD to the April high of 1.3830.

Today at 20:00 (GMT 2), the US Fed’s decision on interest rates will be announced. Experts agree that officials will leave the cost of borrowing at 5.50% but the speech of the head of the regulator, Jerome Powell, could be “hawkish” if he announces a slowdown in the pace of the quantitative easing (QT) program.

Support and resistance

The long-term trend is upward: yesterday, the price reached the resistance level of 1.3775. After a breakout, it may reach the April high of 1.3830 and the November high of 1.3886. If 1.3775 is kept, a decline to 1.3658 is possible.

The medium-term trend is upward: last week, the quotes tested the key support area of 1.3657–1.3638 and began to grow. They may renew the April high of 1.3830 and reach zone 4 (1.3929–1.3910).

Resistance levels: 1.3775, 1.3830, 1.3886.

Support levels: 1.3658, 1.3607, 1.3556.

Trading tips

Long positions may be opened above 1.3800, with the target at 1.3885 and stop loss 1.3760. Implementation time: 9–12 days.

Short positions may be opened below 1.3740, with the target at 1.3658 and stop loss 1.3775.