USD/CAD: the pair shows ambiguous trades 26 March 2021, 08:55

USD/CAD: the pair shows ambiguous trades

26 March 2021, 08:55

Scenario
Timeframe	Intraday
Recommendation	SELL STOP
Entry Point	1.2565
Take Profit	1.2500
Stop Loss	1.2610
Key Levels	1.2400, 1.2439, 1.2500, 1.2570, 1.2600, 1.2627, 1.2650, 1.2700

Alternative scenario
Recommendation	BUY STOP
Entry Point	1.2630
Take Profit	1.2700
Stop Loss	1.2580
Key Levels	1.2400, 1.2439, 1.2500, 1.2570, 1.2600, 1.2627, 1.2650, 1.2700

Current trend

Today, USD is moderately declining against CAD during the Asian session, retreating from the local highs of March 11, renewed yesterday. At the end of the week, USD weakens, despite the publication of strong macroeconomic statistics from the US on Thursday.

Investors assess the prospects for new difficulties in the economy, provoked by the blocking of the Suez Canal and deterioration in relations between the United States and China. The channel has remained blocked since Tuesday, with more than 200 ships currently waiting in line. New difficulties in relations between the United States and China were caused by the refusal of several American companies to cooperate with Chinese cotton suppliers from Xinjiang province, where, according to Washington, human rights are repeatedly and grossly violated.

On Friday, investors will focus on the American statistics on the dynamics of personal income and spending in February. Also, the University of Michigan Consumer Confidence Index for March is expected to be released during the day.

Support and resistance

On the daily chart, Bollinger bands reverse into a horizontal plane. The price range slightly widens from above, letting the “bulls” renew local highs. MACD grows, maintaining a strong buy signal (the histogram is above the signal line). Stochastic reached its highs and reversed downwards, reacting to the "bearish" dynamics of Friday and signaling that USD is overbought in the super short term.

Resistance levels: 1.2600, 1.2627, 1.2650, 1.2700.

Support levels: 1.2570, 1.2500, 1.2439, 1.2400.

 

Trading tips

Short positions may be opened after the rebound from 1.2627 and the breakdown of 1.2570 with the target at 1.2500. Stop loss – 1.2610. Implementation period: 1–2 days.

Long positions may be opened after the breakout of 1.2627 with the target at 1.2700. Stop loss – 1.2580.