Current trend

The USD/CAD pair is correcting at 1.3558. The Canadian currency is trying to regain its position amid ambiguous macroeconomic reports.

Thus, the July retail sales increased from –0.2% to 0.9%, and the core indicator excluding car sales – from 0.3% to 0.4%. On the other hand, the August commodity price index fell from 0.7% to –3.1% MoM and from 4.1% to –2.5% YoY due to lower oil prices, the main import category. The industrial price indicator slowed from –0.1% to –0.8% and from 2.8% to 0.2%, respectively, which may lead to export revenues decrease.

Since the beginning of the week, the American dollar has been falling, trading at 100.40 in USDX. Trading activity has weakened in anticipation of today’s publication of statistics that will help assess the prospects for the recovery of the US economy. The September manufacturing PMI may adjust from 47.9 points to 48.6 points, remaining in the red zone, and the services PMI – from 55.7 points to 55.3 points, which will generally reflect neutral dynamics.

Support and resistance

On the daily chart, the trading instrument is correcting within the ascending channel with dynamic boundaries of 1.3650–1.3530.

Technical indicators are strengthening the sell signal: the EMA fluctuation range on the Alligator indicator is starting to expand, fast EMAs are moving away from each other, and the AO histogram is forming correction bars, approaching the transition level from below.

Resistance levels: 1.3600, 1.3690.

Support levels: 1.3530, 1.3440.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.3530, with the target at 1.3440. Stop loss — 1.3570. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.3600, with the target at 1.3690. Stop loss — 1.3550.