Good morning, traders.
The dollar index continues to drop against its peers as traders are increasingly convinced the Federal Reserve will not boost interest rates this year amid chances of an obvious slowdown in global growth. On Monday, the data release showed that the US services sector grew at a slower-than-expected pace in December. The Institute for Supply Management said its non-manufacturing index fell to 57.6 last month.

Economic Outlook – Jan 08

CAD – Trade Balance
The market is likely to focus on the Canadian trade balance data today. Statistics Canada is due to release the data at 13:30 (GMT) with a forecast of -1.9B vs. -1.2B. Canada is recognized as a resource-based country, which essentially implies that most of the economic growth it experienced early on came from the utilization and export of its own natural resources. That’s why the trade balance figure carries significant value in the determination of Canadian dollar prices.

USD/CAD – Double Bottom Support

The technical side of the USD/CAD is still bearish as the market broke out of the sideways range of $1.3650 – 1.3570. For now, the same support level of $1.3570 is likely to work as a resistance.

The RSI and Stochastics have plunged below 20 now, which is signaling a strong bearish trend. But at the same time, it’s hiking concerns that sooner or later, bulls can jump in to catch the retracement.

USD/CAD – Key Trading Levels
Support   Resistance
1.3277     1.3293
1.3267     1.3299
1.3251      1.3314
Key Trading Level: 1.3283

USD/CAD – Trading Plan

Today, the idea is to stay bearish under 1.3280 to target 1.32500. Whereas, the bearish breakout of 1.3245 can give us further sell opportunity until 1.3145.

Good luck!