USD/CAD: the dollar is strengthening 29 January 2021, 10:57

 

USD/CAD: the dollar is strengthening

29 January 2021, 10:57

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	1.2905
Take Profit	1.3000
Stop Loss	1.2850
Key Levels	1.2700, 1.2738, 1.2800, 1.2850, 1.2900, 1.2950, 1.3000

Alternative scenario
Recommendation	SELL STOP
Entry Point	1.2845
Take Profit	1.2738
Stop Loss	1.2900
Key Levels	1.2700, 1.2738, 1.2800, 1.2850, 1.2900, 1.2950, 1.3000

Current trend

Today during the Asian session, the USD/CAD pair actively grows, trading near the local highs from December 23, renewed yesterday. Thursday’s macroeconomic statistics from the US put pressure on the positions of the American currency. Q4 2020 GDP fell sharply from 33.4% to 4.0% YoY, which was the economy's response to the continued quarantine restrictions and the slowdown in global trade flows. However, the instrument remained positive.

On Friday, traders are waiting for the publication of US data on the dynamics of personal income and expenses for December. Also, investors will pay attention to the consumer confidence index and the dynamics of pending home sales. Canada will release November GDP statistics and December data on commodity and industrial product price indices today.

Support and resistance

On the daily chart, Bollinger Bands are rising moderately. The price range is actively expanding but not as fast as the “bullish” dynamics develop. The MACD indicator is growing, maintaining a strong buy signal (the histogram is above the signal line), and is trying to consolidate above the zero level. Stochastic maintains a strong upward trend but is approaching its highs, signaling that the dollar is overbought in the ultra-short term.

Resistance levels: 1.2900, 1.2950, ​​1.3000.

Support levels: 1.2850, 1.2800, 1.2738, 1.2700.

Trading tips

Long positions may be opened after the breakout of 1.2900 with the target at 1.3000. Stop loss – 1.2850. Implementation period: 1–2 days.

Short positions may be opened after the rebound from the level of 1.2900 and the breakdown of 1.2850 with a target at 1.2738. Stop loss – 1.2900.