USD/CAD 'inside bar' looking for direction, bullish above 200-DMA

Currently, USD/CAD is trading at 1.3162, down -0.12% or (15)-pips on the day, having posted a daily high at 1.3200 and low at 1.3139.

The American dollar vs. Canadian dollar was not on the radar as the pair lacked any motive to push traders and investors to take risks due to a limited economic docket from both countries. 

Historical data available for traders and investors indicates during the last 6-weeks that USD/CAD pair, a commodity-linked currency, had the best trading day at +1.71% (Jan.18) or 227-pips, and the worst at -1.02% (Jan.17) or (133)-pips. 

Canada's latest economic solution: increase retirement age

Andy Blatchford at the Canadian Press, reports, "The Trudeau government’s economic advisory council is recommending Ottawa raise the age of retirement eligibility and explore a national child-care program as ways to deliver a much-needed participation boost for the country’s workforce. To encourage older Canadians to work longer, the council recommended raising the age of eligibility for old age security and the Canada Pension Plan.

Blatchford further writes, "Raising the eligibility age so that it closes the gap between Canada and industrialized countries with the highest labour participation rate among workers 55 and over could add $56 billion to the gross domestic product."

Technical levels to watch

In terms of technical levels, upside barriers are aligned at 1.3211 (high Feb.7), then at 1.3280 (100-DMA) which seems to build a 'Walls of Troy' multi-year resistance region since July 2015 and finally above that at 1.3386 (high Jan.20). While supports are aligned at 1.2968 (low Jan.31), later at 1.2818 (low Sept.7) and below that at 1.2650 (low June 8, 2016). On the other hand, Stochastic Oscillator (5,3,3) seems to head north half way from the overbought territory. Therefore, there is evidence to expect further US dollar gains in the near term.

On the long term view, if the 'double Doji' candlestick formation from 1.3587 (high Nov.) and 1.3597 (high Dec.) is in fact, a relevant top, then any upside potential seems limited for this currency pair. Then, to the downside, supports are aligned at 1.2986 (short-term 23.60% Fib), later at 1.2626 (long-term 50.0% Fib) and finally below that at 1.2460 (low May.2016). As of writing, USD/CAD trades around 1.3156, therefore upside barriers are aligned at 1.3311 (short-term 38.2% Fib), then at 1.3468 (long-term 61.8% Fib) and finally above that at 1.3574 (short-term 50.0% Fib).

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