In August, total Canadian manufacturing sales increased by 1.5% to CAD 79.9 billion, following a 0.3% decline in July. Positive dynamics were recorded in 12 of the 21 subsectors, led by primary metals (+14.0%) and chemicals (+4.4%). Meanwhile, the transportation equipment subsector recorded the largest decline, with sales falling by 2.6% to CAD 12.0 billion, marking the second consecutive monthly decrease. Total inventories increased by 0.2% to CAD 127.7 billion, continuing the upward trend observed since January. The largest contributions to inventory growth came from fabricated metal products (+2.8%) and machinery (+1.3%). The value of unfilled orders remained unchanged at CAD 134.2 billion, with the fabricated metal products subsector recording the largest increase (+4.3%), while the aerospace products and parts industry group declined by 1.3%.
The US Dollar Index (USDX) is retreating from recent highs as investors assess the latest inflation data. The Producer Price Index (PPI) rose by 1.3% month-on-month, compared with forecasts of 0.6%, while the annual increase reached 6.3%, exceeding market expectations. Against this backdrop, investors continue to expect the US Federal Reserve to maintain interest rates at 3.75–4.00% at its October meeting, although the possibility of further monetary tightening before the end of the year remains significant, according to the Chicago Mercantile Exchange (CME) FedWatch Tool.
Support and resistance levels
On the daily chart, the trading instrument is approaching the resistance line of the descending channel with boundaries at 1.3700–1.3850, which was broken in late summer.
Technical indicators maintain a buy signal: the spread between the moving averages of the Alligator indicator is poised to narrow, while the fast EMAs remain significantly above the slow ones, and the Awesome Oscillator (AO) histogram is forming corrective bars in positive territory.
Support levels: 1.4150, 1.4040.
Resistance levels: 1.4210, 1.4330.
USD/CAD Trading Scenarios and Exchange Rate Forecast
Short positions may be opened after the price declines and consolidates below 1.4150, with a target at 1.4040. Stop-loss: 1.4230. Estimated implementation period: 7 days or more.
Long positions may be opened after the price rises and consolidates above 1.4210, with a target at 1.4330. Stop-loss: 1.4140.
Scenario
| Timeframe | Weekly |
| Recommendation | SELL STOP |
| Entry Point | 1.4150 |
| Take Profit | 1.4040 |
| Stop Loss | 1.4230 |
| Key Levels | 1.4040, 1.4150, 1.4210, 1.4330 |
Alternative Scenario
| Recommendation | BUY STOP |
| Entry Point | 1.4210 |
| Take Profit | 1.4330 |
| Stop Loss | 1.4140 |
| Key Levels | 1.4040, 1.4150, 1.4210, 1.4330 |
