Current trend
The Canadian Dollar managed to gain back its losses after the USD/CAD pair opened the week with a rise. However, the Canadian currency remains under pressure amid low oil prices. As sanctions on Iran were lifted last weekend, concerns about growing oversupply of the global oil market have deepened.
Analysts suggest the Bank of Canada might have to apply new stimulus measures as oil prices keep falling. The Regulator holds its next monetary policy meeting on Wednesday.
Support and resistance
Bollinger Bands indicator on the daily chart is growing while the price range is narrowing down at the bottom. MACD histogram has started falling, but the indicator is still giving a buy signal. Stochastic is in the overbought zone and trying to turn down.
A possibility of a downward correction should be considered in the short term.
Support levels: 1.4500, 1.4450, 1.4400, 1.4315 (13 January level), 1.4245, 1.4200, 1.4169, 1.4100 (11 January level), 1.4050, 1.4000.
Resistance levels: 1.4609 (18 January high), 1.4700.
Trading tips
Short positions can be opened after the breakdown of the level of 1.4460 (with appropriate indicators signals) with the target at 1.4320 and stop-loss at 1.4500. Validity – 1-2 days.
Long positions can be opened after the breakout of the level of 1.4560 with targets at 1.4610, 1.4650, 1.4700 and stop-loss at 1.4530. Validity – 2-3 days.