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USDCAD Rice Decline may Become a Trend
10/31/2022 2:09 PMLast week, against the background of the upward dynamics of oil quotes, which added 3.51%, and the weakening of the US dollar, the USD/CAD pair renewed the minimum of October 5 around 1.3500 but is now actively recovering its positions.
The decrease in the Manufacturing PMI in October to 49.9 points and the correction of the Service PMI sector to 46.6 points weakened the US dollar. The statistics on basic orders for durable goods, which decreased by 0.5% MoM in September, also hurt the currency's position. Also, on Friday, investors followed data on personal consumption spending, which remained unchanged at 0.5% MoM and increased from 4.9% to 5.1% YoY, while growth in personal income was recorded at 0.4%, and expenses – were 0.6%. High inflation will become a catalyst for the continuation of the hawkish monetary policy of the US Federal Reserve.
However, the long-term trend in the USD/CAD pair remains upward. The key support is at 1.3500, which could not be broken through, and if it is held, the quotes will probably continue to rise to 1.3830, and after its breakdown, we can expect a trend change with the target at the support level of 1.3200.
The medium-term trend is downwards. Last week, trading participants reached target zone 2 (1.3523–1.3502), which investors held, which led to a correction to the key trend resistance 1.3740–1.3717. If it is reached, new short positions may be opened with the target at last week's low of 1.3500.
Resistance levels: 1.3735, 1.3830, 1.3960. | Support levels: 1.3500, 1.3200.
