USD/CAD: THE INSTRUMENT IS DEVELOPING FLAT DYNAMICS

Current trend

USD/CAD is correcting around 1.3476. Activity on the market remains restrained, while trading participants expect the publication of macroeconomic statistics on the dynamics of producer inflation and retail sales volumes in the United States.

The Producer Price Index is forecast to add another 0.3% month-on-month in February and adjust from 0.9% to 1.1% year-on-year, while the Core CPI excluding Food and Energy is likely to fall from 2.0% to 1.9%. In turn, Retail Sales volumes may increase by 0.8% after a downward trend of the same amount in the previous month. More persistent inflation will act as an obstacle for the US Federal Reserve to implement plans to adjust borrowing costs this year; however, the market is still counting on three rate cuts, the first of which could take place in June. Today, during the day, data on jobless claims will be published: Initial Jobless Claims for the week ended March 8 is projected to increase from 217.0 thousand to 218.0 thousand.

In Canada, statistics on Manufacturing Sales volumes will be presented today: an increase of 0.4% is expected in January after -0.7% in the previous month, while Wholesale Sales could decrease by 0.6% after increasing by 0.3% in December 2023.

Support and resistance

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range expands from below, making way for new local lows for the "bears". MACD is declining keeping a weak sell signal (located below the signal line) The indicator is trying to consolidate below the zero level. Stochastic keeps an active upward direction and is located approximately in the center of its area.

Resistance levels: 1.3500, 1.3525, 1.3550, 1.3600.

Support levels: 1.3450, 1.3400, 1.3350, 1.3300.

Trading tips

Short positions may be opened after a breakdown of 1.3450 with the target at 1.3350. Stop-loss — 0.3500. Implementation time: 2-3 days.

The return of the "bullish" trend with the breakout of 1.3500 may become a signal for new purchases with the target of 1.3600. Stop-loss — 1.3450.