Current trend

Amid local stabilization of the American currency, the USD/CAD pair is correcting downwards, trading at 1.3729.

The Canadian currency is supported by the labor statistics. The July unemployment rate remained at 6.4% against the forecast of 6.5% due to an increase in full employment by 61.6K after a decrease of 3.4K earlier. Part-time employment changed from 1.9K to –64.4K, as a result of which the total indicator decreased from –1.4% to –2.8%, corresponding to the norm of seasonal fluctuations.

The American dollar is trading at 102.90 in USDX. The currency will maintain the current trend until new inflation data is released tomorrow at 14:30 (GMT 2). The July consumer price index may be the key parameter based on which US Fed officials will decide on the size of the interest rate cut. If analysts’ forecasts are correct, and the indicator slows from the current 3.0% to 2.9% and below, an adjustment in the cost of borrowing by –50 basis points may follow, and if it remains above 3.0%, a change of –25 basis points is likely.

Support and resistance

On the daily chart, the trading instrument is correcting, approaching the support line of the ascending channel with dynamic boundaries of 1.3900–1.3670.

Technical indicators are weakening the buy signal: the EMA oscillation range on the Alligator indicator is narrowing in the direction of decline, and the AO histogram is forming downward bars above the transition level.

Resistance levels: 1.3760, 1.3870.

Support levels: 1.3700, 1.3600.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.3700, with the target at 1.3600. Stop loss — 1.3750. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.3760, with the target at 1.3870. Stop loss — 1.3720.