Review and dynamics
Since the beginning of this month, USD/CAD fell sharply, almost completely offsetting upward correction of May. Since the end of last week, correction in oil prices has begun, due to the fact that oil company Baker Hughes reported an increase in the number of active oil rigs in the United States. It also caused the rise in the pair USD/CAD. Recently, the American company Genscape Inc. reported of the possible growth in the US oil reserves on the week of 4 – 10 of June by 525, 000 barrels, which will negatively affect oil prices, and consequently, cause the fall in the Canadian dollar. On the daily chart pair USD/CAD is moving in a new ascending channel with the lower limit at the level of 1.2635 (Fibonacci 50% to the rise from the beginning of July 2014 and the level of 1.0650).
Although on the monthly chart the indicators OsMA and Stochastic give sell signals, the indicators on 4-hour and daily charts have reversed in favour of buy positions. It is possible that the pair will rise up to resistance level of 1.2920 (ЕМА200 and upper limit of the descending channel on 4-hour chart) and 1.2955 (ЕМА50 on the daily6 chart).
Breakout of the level of 1.2955 will trigger further rise in the pair up to 1.3100 (ЕМА200 on the daily chart and Fibonacci 38.2%) in the ascending channel on the daily chart with the upper limit at the level of 1.3300.
As an alternative scenario downtrend can resume after the breakout of the level of 1.2635, and the pair USD/CAD can go to support level of 1.2170 (ЕМА144 on the weekly chart and Fibonacci 61.8%).
The trend can reverse in the pair USD/CAD if the price consolidates above the level of 1.3100.
Support levels: 1.2755, 1.2635, 1.2600 and 1.2525.
Resistance levels: 1.2920, 1.2955, 1.3100, 1.3185, 1.3200 and 1.3300.
Buy above the level of 1.2860. Stop-Loss: 1.2810. Take-Profit: 1.2900, 1.2955, 1.3100, 1.3185 and 1.3300.
Sell Stop: 1.2810. Stop-Loss: 1.2860. Take-Profit: 1.2755, 1.2635, 1.2525, 1.2500 and 1.2200.
In the ascending channel
To the level of 1.2920