The USD/CAD has managed to increase today, has recovered a little after the yesterday’s drop, technically is still expected to increase after another false breakout in the yesterday’s trading session, but remains to see what will happen because the US dollar index remains under selling pressure. The USD has dragged the pair higher as the USDX has managed to increase a little after the yesterday’s impressive drop. The USD is approaching the 101.00 psychological level again, a further increase will help the greenback to appreciate versus all its rivals, the index has found temporary support at 100.43 and is struggling to reach new highs, personally I believe that the index will move sideways in the coming weeks.
The Loonie continues to drop also because the Canadian data have failed to impress, the Foreign Securities Purchases have increased from 7.26B to 10.23B, but have failed to reach the 11.59B estimate, the poor data have forced the Loonie to drop further versus the greenback. We’ll see what will happen in the coming days, we still need a confirmation that the price will start another leg higher.
The rate has increased after the yesterday’s drop, right now is trading right above the third warning line (wl3) of the former ascending pitchfork, will increase further if will have enough energy to stabilize above this line. Technically is somehow expected to increase after the failure to close below the 1.3047 static support, the breakdown below the warning line (wl3) could be invalidated by the today’s increase.
Could increase again after the failure to close on the median line (ML) of the major descending pitchfork, you can see that has closed much above this level. The behavior has changed on the short term when the price has started to make higher lows, so I believe that only the fundamental factors could force the price to decrease again.
Looks like that the price has developed an Inverse Head and Shoulders on the daily chart, now could be attracted by the upper median line (uml) of the descending pitchfork as the rate has failed to retest the median line (ml) of the descending pitchfork.