In July, total manufacturing sales rose from 0.3% to 2.5% or CAD 70.3 billion. The growth was driven by sales of transportation equipment (8.6%), petroleum and coal products (6.2%), and primary metals (3.5%). Wholesale sales excluding oil and grain increased by 1.2% to CAD 86.0 billion month-on-month and by 4.3% year-on-year. Acceleration was observed in four of seven sectors, led by motor vehicles (5.1%) and building materials (+2.7%).
The US dollar is trading at 96.80 on the USDX. Yesterday, President Donald Trump accused the US Federal Reserve of keeping interest rates unchanged, which he said caused stagnation in the housing market, and called for a stronger adjustment. Investors hope that after the monetary policy meeting tomorrow at 20:00 (GMT+2), the regulator will unveil a plan for further rate cuts before year-end; otherwise, the currency could update yearly lows. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a 25 basis point change stands at 96.1%.
Analysts at Morgan Stanley have updated their forecast for the regulator’s further actions amid labor market cooling and now expect a total reduction of 100 basis points by the end of January.
Support and resistance levels
On the daily chart, the instrument is holding slightly above the support line of the ascending channel with boundaries at 1.4020–1.3750.
Technical indicators are preparing to issue a sell signal: the range on the Alligator indicator remains narrow, fast EMAs are near the signal line, and the AO histogram is forming corrective bars just above the zero line.
Resistance levels: 1.3850, 1.4020.
Support levels: 1.3720, 1.3540.
Trading scenarios and USD/CAD forecast
Short positions may be opened after a decline and consolidation below 1.3720 with a target at 1.3540. Stop-loss — 1.3800. Implementation period: 7 days or more.
Long positions may be opened after growth and consolidation above 1.3850 with a target at 1.4020. Stop-loss — 1.3780.
Scenario
| Timeframe | Weekly |
| Recommendations | SELL STOP |
| Entry point | 1.3720 |
| Take Profit | 1.3540 |
| Stop Loss | 1.3800 |
| Key levels | 1.3540, 1.3720, 1.3850, 1.4020 |
Alternative scenario
| Recommendations | BUY STOP |
| Entry point | 1.3850 |
| Take Profit | 1.4020 |
| Stop Loss | 1.3780 |
| Key levels | 1.3540, 1.3720, 1.3850, 1.4020 |