Current trend

Amid the stabilization of the American currency, the USD/CAD pair is trading at 1.3524.

The Canadian currency is supported by positive macroeconomic statistics. The June gross domestic product (GDP) showed zero dynamics after growing by 0.1% earlier MoM, enough to increase from 0.4% to 0.5% QoQ and from a revised 0.56% to 0.91% YoY, which could become a driver for strengthening the positive trend for the national currency. Yesterday, trading platforms were closed due to the Labor Day celebration. However, today, the “bulls” may support the positions of the Canadian dollar, continuing to open new buy positions.

The American dollar is strengthening, trading at 101.20 in USDX, supported by the manufacturing PMI. Although analysts expect the Markit manufacturing PMI to decline from 49.6 points to 48.0 points, the Institute for Supply Management (ISM) manufacturing PMI may rise from 46.8 points to 47.5 points. Statistically, investors react more actively to the ISM report, and the expected growth may support the dollar in the short term. However, the ISM manufacturing price index, according to preliminary estimates, will decline from 52.9 points to 52.1 points, limiting the asset’s dynamics.

Support and resistance

On the daily chart, the trading instrument is moving away from the support line of the ascending channel with dynamic boundaries of 1.3960–1.3640. Technical indicators maintain a stable sell signal: the EMA oscillation range on the Alligator indicator is expanding in the direction of decline, and the AO histogram is forming correction bars below the transition level.

Resistance levels: 1.3560, 1.3680.

Support levels: 1.3490, 1.3320.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.3490, with the target at 1.3320. Stop loss is 1.3560. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.3560, with the target at 1.3680. Stop loss is 1.3500.