Re: Forex Analysis by LiteForex
liteForex USD/CAD: the pair is trading in different directions
Last Friday the pair’s dynamics was controversial after the US consumer inflation and retail sales data publications, and now the US dollar is growing insignificantly against Canadian currency.
The Friday’s US data weren’t’ disappointing, but the investors are lesser and lesser believing in another Fed’s interest rate rise this year. However, after the Michigan Consumer Sentiment Index publication part of the optimistic moods restored. In October the index grew to the record level of 101.1 points from 95.1 points in September, while analysts expected the growth to 95.0 points.
During the morning session on October, 16, the pair is in correction, waiting for new signals. In particular, the Bank of Canada Business Outlook Survey will be released at 16:30 (GMT+2).
Support and resistance
On the daily chart Bollinger Bands are reversing into flat. The price range has narrowed to the minimum, reflecting the controversial trading dynamics of the recent days. It’s better to wait until new trading signal appear.
MACD is decreasing, keeping a weak sell signal (the histogram is below the signal line). Taking into the consideration the recent flat dynamics, the signal is not worth believing, but the current short positions in the short term can be kept for some time.
Stochastic is reversing upwards near the level of 20, which is conditional border of the oversold area. The indicator’s readings reflect the possibility of correctional growth development in the short or very short term.
Resistance levels: 1.2500, 1.2537, 1.2597.
Support levels: 1.2447, 1.2414, 1.2300, 1.2238.
Open long positions after the breakout of the levels of 1.2500 or 1.2537 with the targets at 1.2600–1.2650. Stop loss is 1.2450–1.2470. Implementation period: 2 days.
The reversal near the current levels and the breakdown of the levels 1.2447 or 1.2414 can be the signal to open short positions with the target at 1.2300. Stop loss is not further than 1.2500. Implementation period: 2–3 days.