The USD/CAD currency pair is still being traded in a prolonged flat with a rather wide trading range. At the moment, Loonie is consolidating near the round level of 1.35000. Financial market participants expect additional drivers.
On Wednesday, May 29, the Bank of Canada kept its key interest rate unchanged at 1.75%. The latest economic releases match forecasts in the Central Bank April report on the monetary policy. The regulator believes that the slowdown in economic growth in the country at the end of 2018 and at the beginning of 2019 was temporary. Representatives of the Bank of Canada also believe that there is every reason to expect a resumption of GDP growth in the second quarter. The oil sector has begun to recover, housing and labor market figures indicate steady growth. At the same time, the regulator is concerned about the escalation of the trade conflict between the United States and China, as well as the growing risks in the global economy. In the near future, the Bank of Canada plans to adhere to the current course of monetary policy. The Board of Governors will especially closely monitor changes in household spending, the oil market and the state of the global economy.
We recommend paying attention to the data on the GDP of Canada for the first quarter, which will be published on Friday, May 31. Experts expect that in March, the growth of the country's economy will accelerate to 0.3% (m/m).
These statistics may affect the dynamics of the USD/CAD currency pair in the short term. We recommend paying attention to the difference between the actual and forecasted values of the indicators.
Let's consider the current technical pattern on the USD/CAD currency pair
- Support levels: 1.34800, 1.34350, 1.34000
- Resistance levels: 1.35250, 1.36000
- - The price has fixed above 50 MA and 200 MA;
- - The MACD histogram is in the positive zone.
At the moment, the USD/CAD currency pair is consolidating near key extremes. Local levels of support and resistance are: 1.34800 and 1.35250, respectively. The technical pattern is ambiguous. Indicators point to bullish trend:
Nevertheless, we recommend opening positions from key levels.
If the price fixes above 1.35250, further growth of the USD/CAD currency pair is expected. The movement is tending to the round level of 1.36000.
Alternative option. If the price fixes below the support level of 1.34800, you need to consider selling USD/CAD. The movement is tending to 1.34350-1.34000.
Confirmations and entry points to the market should be looked for on lower timeframes. When tracking positions, we recommend using a trailing stop.
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