Current dynamics

Against the backdrop of the strengthening of the US dollar, the USD/CAD pair is trading at the level of 1.3922, close to the resistance level of 1.3960.

In October, the US currency gained 3.25% on the USDX, and the trend may continue this month against the backdrop of the election of Republican Party representative Donald Trump as head of state. Investors fear that tax cuts for US companies and tariffs on imports will reduce inflation, which will cause Federal Reserve officials to abandon the monetary policy easing initiated in September.

The Canadian dollar is under pressure from October labor market data: the employment level fell from 46.7 thousand to 14.5 thousand compared to the forecast of 27.9 thousand, and unemployment remained at the level of 6.5% against preliminary estimates of 6.6%, which may contribute further to the weakening of the currency in the medium term.

The long-term trend is bullish: at the end of October, the price updated the August high of 1.3947, and last week it tested the resistance area of 1.3960, after which it is expected to update the October 2022 high of 1.3978 and reach the level of 1.4100. In the case of a reversal at the level of 1.3960, a correction is likely with targets of 1.3820 and 1.3645. The RSI (14) indicator entered the overbought zone in early November, but left it and reflects the possibility of further growth.

The medium-term trend remains bullish: in October, quotes broke out zone 2 (1.3848–1.3827) and headed towards zone 3 (1.4094–1.4071). In case of a decline to the trend support area of 1.3719–1.3697, long positions with the target at the November high of 1.3955 will be relevant, but if the support area is broken, the trend is expected to change to a downward trend towards the area of 1.3488–1.3466.

Support and resistance levels

Resistance levels: 1.3960, 1.4100, 1.4250.

Support levels: 1.3820, 1.3645, 1.3438.

Business scenarios

Long positions can be opened from the level of 1.3820 with the target at 1.3960 and the stop-loss at 1.3775. Implementation time: 9–12 days.

Short positions can be opened below the level of 1.3775 with the target of 1.3645 and the stop-loss at the level of 1.3825.