Current trend

Against the neutral dynamics of the US dollar, the USD/CAD pair falls, trading at 1.3127.

The Canadian currency may be supported by inflation data, which will be published today at 14:30 (GMT 2): according to preliminary estimates, the consumer price index will correct by 0.5% in May, acting as a catalyst for a slowdown in the rate from 4.4% to 3.4% YoY, while the core value, excluding food and fuel costs, may fall from 4.1% to 3.9%. If the forecasts are correct, the weakening of inflation will allow the Bank of Canada to reduce pressure on the economy and keep the interest rate in the neutral zone for some more time.

The US dollar stays at 102.200 in the USD Index. Today, a block of macroeconomic data will be published, where the key report on the real estate market is expected: analysts expect an increase in the number of issued building permits from 1.417M to 1.491M, however, new home sales may decrease from 683.0K to 675.0K. Also, investors will pay attention to the consumer confidence index from the Conference Board, which may increase from 102.3 points to 104.0 points. In general, experts’ expectations are positive, which may support the dollar and stop the fall of the USD/CAD pair.

Support and resistance

On the daily chart, the trading instrument is falling within the global Triangle pattern, moving away from the lower border of 1.3300.

Technical indicators maintain a stable sell signal: the range of fluctuations of the EMA on the Alligator indicator expands downwards, and the AO histogram forms downward bars below the transition level.

Resistance levels: 1.3210, 1.3360.

Support levels: 1.3080, 1.2900.

Trading tips

Short positions may be opened after the price drops and consolidates below 1.3080 with the target at 1.2900. Stop loss – 1.3150. Implementation period: 7 days or more.

Long positions may be opened after a reversal, growth, and consolidation of the price above 1.3210 with the target at 1.3360. Stop loss – 1.3150.