Current trend

The USD/CAD pair shows slight growth, holding near 1.3740, while traders continue to evaluate macroeconomic statistics published last week.

The market's focus was on the results of the US Federal Reserve meeting, as a result of which the interest rate was kept at 5.50%. At the same time, for the first time in three months, officials published updated forecasts for the dynamics of the indicator, according to which by the end of 2024 the cost of borrowing will be reduced from 5.50% to 5.10%, which is significantly higher than the 4.60% that was previously assumed. In the follow-up statement, the Chair of the regulator, Jerome Powell, again warned markets against excessive expectations regarding the pace of monetary easing, noting the continued risks of sticky inflation and the fairly stable overall health of the US economy. However, investors still tend to overestimate existing forecasts: for example, the main scenario assumes two full interest rate cuts of 25 basis points each to 5.00% at the end of 2024.

Macroeconomic releases from the US on Friday contributed to the decline in trading activity. The Consumer Confidence Index from the University of Michigan in June dropped from 69.1 points to 65.6 points, with expectations at 72.0 points, and Initial Jobless Claims increased from 229.0 thousand to 242.0 thousand, while Continuing Jobless Claims increased from 1.790 million to 1.820 million. In addition, the market practically ignored the slowdown in the Producer Price Index from 2.5% to 2.3% in annual terms.

Meanwhile, Canadian statistics showed an increase in Wholesale Sales volumes in April by 2.4% after –1.3% a month earlier, while analysts expected 2.8%, and Manufacturing Sales added 1.1% after –1.8% in March with preliminary estimates of 1.2%.

Support and resistance

Bollinger Bands in D1 chart show active growth. The price range expands from above, freeing a path to new local highs for the "bulls". MACD is declining keeping a weak sell signal (located below the signal line) Stochastic, reacting to the emergence of mixed trading dynamics in the ultra-short term, is trying to reverse horizontally, signaling an approximate balance of forces in the near future.

Resistance levels: 1.3762, 1.3800, 1.3845, 1.3900.

Support levels: 1.3730, 1.3700, 1.3675, 1.3650.

Trading tips

Long positions can be opened after a breakout of 1.3762 with the target of 1.3820. Stop-loss — 1.3730. Implementation time: 2-3 days.

A rebound from 1.3762 as from resistance, followed by a breakdown of 1.3730 may become a signal for opening of new short positions with the target at 1.3675. Stop-loss — 1.3762.