USD/CAD: USD remains under pressure 23 February 2021, 09:05

USD/CAD: USD remains under pressure

23 February 2021, 09:05

Scenario
Timeframe	Intraday
Recommendation	SELL STOP
Entry Point	1.2565
Take Profit	1.2500
Stop Loss	1.2610
Key Levels	1.2500, 1.2540, 1.2570, 1.2622, 1.2659, 1.2700, 1.2738

Alternative scenario
Recommendation	BUY STOP
Entry Point	1.2625
Take Profit	1.2700, 1.2738
Stop Loss	1.2570
Key Levels	1.2500, 1.2540, 1.2570, 1.2622, 1.2659, 1.2700, 1.2738

Current trend

USD has shown a fairly strong decline against CAD during today's Asian trading session, again trading near its lows since April 2018, updated the day before. USD positions remain vulnerable amid expectations of approval of new measures to support the American economy in the amount of USD 1.9 trillion, which will lead to increased inflationary pressures. In turn, investors are responding positively to the active growth in the yields of US bonds, which are updating record highs.

Today, investors are awaiting a speech by the Fed's Chairman Jerome Powell in the US Congress, as well as the publication of macroeconomic statistics on the dynamics of retail sales and the S&P/Case-Shiller Home Price Indices. Also today, the Bank of Canada Governor Tiff Macklem will make a speech, during which he can clarify the regulator's plans of changing monetary policy in the near future.

Support and resistance

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is narrowing, reflecting last Monday’s attempt to slow the "bearish" trend. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic maintains a strong downtrend, but is rapidly approaching zero, indicating the risks of an oversold instrument in the ultra-short term.

Existing short positions should be kept until technical indicators are clarified.

Resistance levels: 1.2622, 1.2659, 1.2700, 1.2738.

Support levels: 1.2570, 1.2540, 1.2500.

Trading tips

The breakdown of 1.2570 may serve as a signal to new sales with the target at 1.2500. Stop-loss – 1.2610. Implementation time: 1-2 days.

To open long positions, one can rely on the rebound from the support level of 1.2570, with the subsequent breakout of 1.2622. Take-profit – 1.2700–1.2738. Stop-loss – 1.2570.