USD/CAD: consolidation near record lows 16 March 2021, 10:49

USD/CAD: consolidation near record lows

16 March 2021, 10:49

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	1.2505
Take Profit	1.2600
Stop Loss	1.2439
Key Levels	1.2353, 1.2400, 1.2439, 1.2500, 1.2540, 1.2570, 1.2600

Alternative scenario
Recommendation	SELL STOP
Entry Point	1.2435
Take Profit	1.2353
Stop Loss	1.2485
Key Levels	1.2353, 1.2400, 1.2439, 1.2500, 1.2540, 1.2570, 1.2600

Current trend

The USD/CAD pair is showing ambiguous trading dynamics, moving near record lows of February 2018, renewed yesterday.

The US dollar is supported by high yields on US Treasuries, as well as an overall optimistic outlook on the national economy following the recent approval of additional support measures of $1.9T. However, investors are in no hurry to open new positions, preferring to wait until the minutes of the major Central Banks' meetings are released. The US Federal Reserve meeting will take place on Wednesday, and on the same day, the Bank of Canada will publish its February inflation statistics.

Yesterday's Canadian macroeconomic data did not have a noticeable impact on the dynamics of the instrument. Manufacturing sales rose by 3.1% MoM for January after rising by 0.9% MoM for the previous month. Analysts expected an increase of 2.5% MoM. At the same time, the number of started construction of houses for February decreased from 284.4K to 245.9K against the forecast of 245K.

Support and resistance

On the daily chart, Bollinger bands are steadily declining. The price range changes slightly but remains wide enough for the current level of market activity. The MACD indicator is falling, maintaining a relatively strong sell signal (the histogram is below the signal line). Stochastic, located near its lows, is trying to reverse upwards, indicating that the instrument may become oversold in the super short term.

Resistance levels: 1.2500, 1.2540, 1.2570, 1.2600.

Support levels: 1.2439, 1.2400, 1.2353.

Trading tips

Long positions may be opened after the breakout of 1.2500 with the target at 1.2600. Stop loss – 1.2439. Implementation period: 2–3 days.

Short positions may be opened after the breakdown of 1.2439 with the target at 1.2353. Stop loss – 1.2485.