The USD/CAD pair shows a downward trend against the background of the fall of the US dollar, trading at the level of 1.2455.
The Canadian currency has seized the initiative in the pair and is rising. Recent data on consumer prices, which are the main indicator of inflation, have inspired positive investors. Fears that the Canadian economy will follow the path of the United States began to dissipate, as the consumer price index slowed to 0.3% in monthly terms. This was reflected in the annual rate, which slowed to 3.1% from 3.6% last month. This is good news, since the value is moving towards the target range again.
The US dollar index for this week made the most significant drop in the last 4 months, dropping by a whole point from 93,000 to 91.988. There are several reasons at once. This includes dissatisfaction with the passivity of the US Federal Reserve in the face of rising inflation, and stagnation in the labor market, as well as an unexpected slowdown in economic growth. In the second quarter, it grew by only 6.5%, although analysts had expected an increase of at least 8.5%. Sales as a part of GDP decreased to 7.7%, compared to 9.1% for the first quarter.
Support and resistance levels
On the global chart, the price is actively decreasing within the forex forecast. Technical indicators hold a global buy signal, but they more clearly indicate a reversal: the fast EMAS on the alligator indicator have crossed each other, and the histogram of the AO oscillator is trading in a positive zone, quickly approaching the transition level.
Resistance levels: 1.2605, 1.2785.
Support levels: 1.2403, 1.2136.
Trading Scenarios
Thus, USD/CAD forecast of the Canadian Dollar for August 2-3, 2021, if the local decline of the asset continues, as well as the price fixes below the level of 1.2403, selling positions with a target of 1.2136 will be relevant. The stop loss is 1.2500. Implementation period: 7 days or more.
If the global growth of the asset continues, as well as the price fixes above the level of 1.2605, buy positions with the target of 1.2785 will be relevant. The stop loss is 1.2500.