- The USD/CAD pair declined sharply in US session hitting as low as 1.3834 after oil prices jumped as much as 5 percent on Wednesday after investors broadly sold off U.S. dollar after weak ISM non-Manufacturing PMI data. Despite weekly data showing a surprisingly large rise in crude oil inventories, the oil-correlated canadian dollar rose against US dollar due to high volatility in the market ahead of Fridays non- farm payrolls.
- However, further decline towards lower levels should be limited as pair faces strong support at 1.3800 levels Technically stochastic is in oversold levels, RSI Indicator is slowly turning up at 37.
- To the upside, the strong resistance can be seen at 1.4000, a break above will take the pair towards next resistance level at 1.4130.
- To the downside immediate support can be seen at 1.3800 levels, a break below will open the door towards next level at 1.3765.Recommendation: Go long around 1.3800, targets 1.3900, 1.3980, SL 1.3700Resistance LevelsR1: 1.3915 (50% Retracement level)R2: 1.4000 (38.2% Retracement level)R3: 1.4130 (23.6% Retracement level)Support LevelsS1: 1.3800 (61.8% Retracement level)S2: 1.3765 (Dec 17th lows)S3: 1.3700 (Psychological levels)
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