USD/CAD: the pair is developing upward dynamics

OANDA:USDCAD   Dolar U.S/Dolar Kanada
Current trend

US dollar             dropped considerably against Canadian currency, marking a new local minimum since December 6. The reason for the development of “bearish” tendencies was general weakening of the US currency in view of resumed reduction of returns on US bonds as well as the release of uncertain macroeconomic statistics from the USA. In turn, Canadian Thursday statistics was above expectations which caused the increase of demand for CAD.

In November Canadian CPI             grew by 0.3% MoM after increase by 0.1% in October. Analysts expected the index to increase by 0.2% MoM. YoY inflation grew by 2.1% after increase by 1.4% in October. In this case the real dynamics was also better than the outlooks of experts. The data on retail sales in Canada in October were also positive. MoM the indicator increased by 1.5% against the expected growth by only 0.3%.

During the morning session on December 22 the instrument is trading in both directions waiting for the occurrence of new market drivers. On Friday attention will be focused in US statistics on personal income             and expenditure that is due at 15:30 (GMT+2) and the data on new house sales at 17:00 (GMT+2). Canada will respond with a release of monthly GDP data for October at 15:30 (GMT+2).

Support and resistance

Bollinger Bands in D1 chart show flat dynamics. The price range is widening. MACD indicator is reducing preserving a quite stable sell signal (the histogram is below the signal line). Stochastoc preserves downward direction.

Resistance levels: 1.2769, 1.2800, 1.2836, 1.2880.

Support levels: 1.2735, 1.2700, 1.2664, 1.2621.

Trading tips

Long positions may be opened after breaking out the level of 1.2769 with targets at 1.2836, 1.2850 and stop-loss at 1.2730. The period of implementation is 2-3 days.

The return of the “bearish” trend with the breakdown of the level of 1.2700 may be a signal for the continuation of sales with targets at 1.2621, 1.2600 and stop-loss at 1.2735. The period of implementation is 2-3 days.



Timeframe Intraday
Recommendation BUY STOP
Entry Point 1.2775
Take Profit 1.2836, 1.2850
Stop Loss 1.2730
Key Levels 1.2621, 1.2664, 1.2700, 1.2735, 1.2769, 1.2800, 1.2836, 1.2880

Alternative scenario

Recommendation SELL STOP
Entry Point 1.2690
Take Profit 1.2600
Stop Loss 1.2735
Key Levels 1.2621, 1.2664, 1.2700, 1.2735, 1.2769, 1.2800, 1.2836, 1.2880
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