USD/CAD dropped like a rock today and resumed the yesterday’s bearish candle. The rate was driven lower by the fundamental factors. It has invalidated a further increase and could resume the sideways movement on the short term.

Price moves sideways and needs a spark to be able to escape from it, we’ll have a clear direction only after a valid breakout from it. I really hope that we’ll have a fresh trading opportunity soon.

Right now is very important to see what will happen with the USDX, which is still trading in the red, but much above the 93.18 yesterday’s low. The dollar index is still pressuring a major dynamic resistance, it could drop further after the false breakout above the 93.81 static resistance.

The Loonie was supported by the Canadian Inflation data, the CPI increased by 0.3% in the previous month, beating the 0.25 estimate and the 0.1% in the former reading period, the Retail Sales have increased by 1.5%, more versus the 0.3% estimate and versus the 0.2% growth in the former reading period, while the Core Retail Sales rose by 0.8%, exceeding the 0.4% estimate and the 0.4% in the former reading period. On the other hand, the USD has taken a hit from the Final GDP, which has increased only by 3.2%, less versus the 3.3% estimate and versus the 3.3% growth in the former reading period, while the Unemployment Rate increased unexpectedly higher, from 225K to 245K in the last week, much more versus the 232K estimate.

Price plunged much below the sliding line (SL) of the major red descending pitchfork and below the sliding line (sl) of the minor blue descending pitchfork.A valid breakdown below the sl will confirm a drop towards the 1.2655 level and towards the median line (ML) of the major red descending pitchfork. Actually it could be attracted by the confluence area formed between the median line (ML) with the median line (ml) of the minor descending pitchfork.