[B]USD/CAD. Investors are waiting for the data on Canadian GDP[/B]
[B]1. Current trend of the currency pair USD/CAD[/B]
The currency pair USD/CAD started this week with the growth in quotes. In the middle of the week the pair gained about 140 points. On Wednesday the price has reached new highs since June last year at the level of 1.0420. The US data on consumer confidence index for May was the main driver for the growth in the pair. Index was above experts’ expectations, amounting to 76.2 points, which is the highest level since January 2008 and a strong indication of economic recovery in American. However, the pair failed to break down resistance level of 1.0420 and shifted to downward correction. The rise in the Canadian dollar was driven be the fact that the Bank of Canada left key interest rate unchanged at the level of 1.99%. However representatives of the Bank did not rule out a chance that interest rate may be lowered in the near future.
[B]2. Important levels (support and resistance)[/B]
At the moment the pair traded near support level of 1.0350. It is likely that the price will go up to the levels of 1.0405, 1.0480 and 1.0560 in the near future. Note that GDP of Canada will become known on Friday. Experts expect that domestic gross product may fall to 0.1%, which will trigger the rise in the pair. However, temporary downward correction to the level of 1.0285 may take place during the day as well, which will be followed by ascending movement. In the current situation it is advisable to open long positions from the level of 1.0375 with profit taking at the level of 1.0480.
[B]3. Technical indicators[/B]
On the daily chart “Bollinger bands” indicator does not demonstrate significant divergence of the lines, both of them are directed upward; the price chart is in the upper band. MACD histogram is in the overbought zone and in the near future intersection with the signal line is not expected. Stochastic lines are in the oversold zone (80), buy signal is not expected.
Analyst of LiteForex Group of Companies