Being above the key support levels 1.2970 (200 EMA on the weekly chart), 1.3250 (200 EMA on the daily chart), 1.3345 (144 EMA on the daily chart), USD/CAD remains in a long-term bull market zone.
Today, the focus of market participants will be the publication (at 13:30 GMT) of the latest inflation data in Canada. This publication will become a new driver for the movement of the CAD and the USD/CAD pair. Data better than the forecast and previous values will strengthen the Canadian dollar.
If the expected data turns out to be worse than the previous values, this will negatively affect the CAD. In this case, the breakdown of the important short-term resistance level 1.3432 (200 EMA on the 1-hour chart) will be the first signal to resume or increase long positions. The nearest growth target is the 1.3500 resistance level (200 EMA on the 4-hour chart and 50 EMA on the daily chart).
In general, the upward dynamics prevails, and a consistent breakdown of the resistance levels 1.3500, 1.3600, 1.3700 will confirm the main scenario—USD/CAD growth towards last year's highs and the mark of 1.3970.
In an alternative scenario, there will be a rebound from the 1.3432 resistance level and the USD/CAD pair will fall to the 1.3345 support level, from which it will be possible to plan new buy orders.
Only a breakdown of the support levels 1.3250, 1.3185 will aggravate the position of buyers of the pair and increase the risks of its further decline towards the key support level 1.2600 (200 EMA, 144 EMA on the monthly chart), which separates the long-term USD/CAD bullish trend from the bearish one.
Support levels: 1.3400, 1.3345, 1.3300, 1.3250, 1.3200, 1.3185, 1.3100
Resistance levels: 1.3432, 1.3450, 1.3500, 1.3600, 1.3700, 1.3800, 1.3830, 1.3900, 1.3970, 1.4000
Trading scenarios
Sell Stop 1.3385. Stop-Loss 1.3455. Take-Profit 1.3345, 1.3300, 1.3250, 1.3200, 1.3185, 1.3100
Buy Stop 1.3455. Stop-Loss 1.3385. Take-Profit 1.3500, 1.3600, 1.3700, 1.3800, 1.3830, 1.3900, 1.3970, 1.4000
