USD/CAD drops further and seems unstoppable. Price has dropped sharply in the last days after the BOC surprising decision to hike the rate since September. The USD goes down versus all its rivals as the United States economic data continues to come in worse. I’ve said in the last weeks that the Federal Reserve could still hike the rate in December if the US data will impress again starting with September, but unfortunately this scenario is off the table right now.

The USD could increase a little only because could be too oversold to stay lower. The greenback reached some crucial zones against some of its counterparts.

You should be careful later as the Canadian data should bring a high volatility again, the Employment Change could increase from 10.9K to 17.8K, while the Unemployment Rate is forecasted to remain steady at 6.3% for the second month in August.  Moreover the Capacity Utilization Rate could be reported at 84.9%, higher versus the 83.3%.

The US Final Wholesale Inventories could increase by 0.4% in July, matching the 0.4% growth in June, while the Consumer Credit could jump to 15.1B, from 12.4B. Only a disappointment from Canada could send the rate much higher on the short term.

You can see that the price moves down within the descending channel. Will be very important how it will react today because has managed to retest the downside line of the down channel. Price slipped below the dynamic support line, but the breakdown needs confirmation.

We have an important support area here, you can see that I drew other two dynamic support levels, I’m talking about the 150% Fibonacci lines (descending dotted line). Price is under massive selling pressure and the Loonie could receive another helping hand from the Canadian data, some better numbers will send the rate tumbling.

Only an accumulation movement will signal a reversal, but is premature to talk about a reversal at this moment because is very heavy and it could resume the downside movement.