The Canadian dollar is strengthening, and USD/CAD is declining ahead of the Bank of Canada's interest rate decision to be published at 14:45 (GMT) today. If today's statements by the Bank of Canada's leaders are interpreted by the market as dovish, then we should expect a resumption of growth in the USD/CAD pair.
A breakout of resistance levels at 1.3485 (200 EMA on the daily chart) and 1.3505 (144 EMA on the daily chart) will move USD/CAD into the zone of a medium-term bullish market and resume the upward trend in the context of a long-term bullish market. The first signal for the realization of this scenario could be a breakout of resistance levels at 1.3450 (200 EMA on the 1-hour chart) and 1.3465 (50 EMA on the daily chart).
In an alternative scenario, the price will break the important short-term support level at 1.3441 (200 EMA on the 4-hour chart) and continue its decline towards the key support level at 1.3185 (200 EMA on the weekly chart), separating the long-term bullish market from the bearish one. Its breakdown, in turn, will return USD/CAD to the zone of a long-term bearish market, making long-term short positions preferable.
Support levels: 1.3441, 1.3400, 1.3300, 1.3260, 1.3200, 1.3185
Resistance levels: 1.3450, 1.3453, 1.3465, 1.3485, 1.3505, 1.3540, 1.3600, 1.3615, 1.3700, 1.3775, 1.3800, 1.3860, 1.3890, 1.3900, 1.3970, 1.4000
Trading Scenarios
Alternative scenario: Sell Stop 1.3430. Stop-Loss 1.3470. Targets 1.3400, 1.3300, 1.3260, 1.3200, 1.3185
Main scenario: Buy Stop 1.3470. Stop-Loss 1.3430. Targets 1.3485, 1.3505, 1.3540, 1.3600, 1.3615, 1.3700, 1.3775, 1.3800, 1.3860, 1.3890, 1.3900, 1.3970, 1.4000
"Targets" correspond to support/resistance levels. This also does not mean that they will necessarily be reached, but they can serve as a guideline in planning and placing your trading positions.
