Current trend

After testing 1.3350 last week, the quotes of the USD/CAD pair tried to continue the downward trend and fell to the 1.3270 area after the publication of statistics on the Canadian and American labor markets.

Thus, in June, employment in Canada consolidated at 59.9K, exceeding the forecast of 20.0K and the previous value of –17.3K, but unemployment rose by 0.2% to 5.4%. The situation in the US is the opposite: nonfarm payrolls reached 209.0K, lower than expected at 225.0K and the previous value of 306.0K, while unemployment fell by 0.1% to 3.6%.

Thus, from a fundamental point of view, there are ideal conditions for selling the USD/CAD pair, confirmed by the readings of technical indicators.

The long-term trend is downward with the target at last month’s low of 1.3135. The nearest resistance level is at 1.3350, where the price reversed last week. If the downward trend continues, a breakdown of 1.3135 and consolidation below it is expected, allowing the asset to reach 1.2970. In case of a breakout of 1.3350, the correction will continue to 1.3450, from where short positions with the target at 1.3135 are relevant.

The medium-term trend is directed downwards, and as part of the correction last week, the quotes reached the trend border around 1.3356–1.3335, reversed, and began a decline, which may reach 1.3125. If the zone 1.3356–1.3335 is broken, the trend will reverse upwards with the target in zone 2 (1.3583–1.3561).

Support and resistance

Resistance levels: 1.3350, 1.3450.

Support levels: 1.3135, 1.2970.

Trading tips

Short positions may be opened from 1.3450 with the target at 1.3135 and stop loss around 1.3550. Implementation period: 9–12 days.

Long positions may be opened above 1.3550 with the target at 1.3660 and stop loss around 1.3500.