This week the currency pair USD/CAD has traded in the range of 1.1300-1.1200. In the middle of the week, following the release of the US consumer price index, the price has tested the lower limit of the range, but failed to consolidate below this level. In the near future the price can continue to move in the same range, which can become narrower up to 1.1255-1.1200. It is likely that market participants will not take risk prior to the important decisions, which can be taken on the next meeting of the US Fed.
Today, the data on new houses sales in the USA for September will become known. According to the forecast this index is going to decline, which will put some pressure on the USD and push the pair to go down to the bottom limit of the channel.
Support and resistance
Technical indicators show probability of the downward movement. Bollinger bands have started to turn downwards. MACD histogram is in the negative zone; its volumes are slowly increasing. Stochastic lines are also directed downwards.
Support levels: 1.1200 and 1.1160.
Resistance levels: 1.1255, 1.1300 and 1.1360.
In the current situation it makes sense to open long positions if the price pushes off from the level of 1.1200. The target for these positions will be at the level of 1.1255. if the price consolidates below the level of 1.1200 and reaches the level of 1.1190, it is advisable to open short positions with the target of 1.1160.
Analyst of LiteForex Investments LimitedPublication source