Current trend
The USD/CAD pair keeps growing renewing new highs. The main reason for the growth in the pair is strengthening US Dollar that was supported after the Fed meeting on Wednesday at which the regulator, as was expected, increased interest rates in the US by 25 basis points to 0.5%. At the same time, Fed Chair Janet Yellen noted that further monetary policy would remain quite loose.
Today attention needs to be paid to data on the Consumer Price Index for November in Canada. According to forecasts the index will grow that might support the CAD.
Support and resistance
Bollinger Bands on the daily chart is moving up while the price range is widening. However, the indicator suggest a possibility of a correctional fall in the pair. MACD is growing and giving a strong buy signal. Stochastic is in the overbought zone and trying to turn down.
The indicators recommend considering correctional sales.
Support levels: 1.3900, 1.3850, 1.3780 (14 December high), 1.3700, 1.3650, 1.3622, 1.3554 (10 December lows), 1.3500.
Resistance levels: 1.3986 (local high), 1.4050, 1.4100.
Trading tips
Short positions can be opened after the breakdown of the level of 1.3880 with targets at 1.3800, 1.3730 and stop-loss at 1.4020. Validity – 2-3 days.
Long positions can be opened after the breakout of the level of 1.3950 (with the appropriate indicators signals) with targets at 1.4000, 1.4070 and stop-loss at 1.3920. Validity – 2-3 days.