The USD/CAD pair broke through the strong resistance level 1.2800 and consolidated above this mark. Falling oil prices and the US dollar strengthening are two key factors which support the current trend.
Last Wednesday, the Bank of Canada lowered its interest rate and may further ease the monetary policy to boost the Canadian economy.
The following statistics added pressure on the Canadian dollar: reducing Wholesale Sales in Canada (-1.0% in May), growing New Housing Price Index (+ 9.8%) and a 14.5%decrease in Building Permits in May.
Tomorrow at 3:30 p.m. (GMT +3) important statistics are released. Retail Sales in Canada are expected to grow by 0.5% in May (vs. -0.1% in April).
Support and resistance
Today, since the opening of the Asian session, the USD/CAD pair is growing; indicators on the 4-hour chart are moving into the buy zone. Though on the daily chart Stochastic is in the overbought zone and OsMA histogram is lowering to the zero line, the fundamental factor supports the pair growth.
The recent resistance 1.2800 is now the strong support level for the further pair growth.
Support levels: 1.2890, 1.2835, 1.2800, 1.2740, 1.2700.
Resistance levels: 1.2960, 1.3000, 1.3060.
Open buy positions from the current levels or place pending orders at 1.2930, 1.2900, 1.2890 with targets at 1.3000, 1.3040, 1.3060, 1.3100 and stop-loss at 1.2850.
Alternative short positions may be considered after the breakdown of 1.2800 with targets at 1.2700, 1.2600; and if the downtrend resumes, the further target should be 1.2290 (23.6% Fibonacci).