USD/CAD has rallied and has signaled that the downside movement can be completed after another false breakdown below a dynamic support. Price increased as the USDX has managed to bounce back on the short term.

However, we still need a confirmation that the rate will increase in the upcoming period. This could still be only a temporary rebound if the USDX will drop again. The USD needs strong support from the US economy to be able to start an important upside movement versus its rivals.

The Loonie has lost significant ground versus the USD also because the Canadian GDP has increased only by 0.0%, less versus the 0.1% estimate and after the 0.5% growth in the former reading period.

Price has made another false breakdown below the 50% Fibonacci line of the descending pitchfork and now could jump towards the upper median line (uml). It has found a strong support on the downside 50% Fibonacci line of the ascending pitchfork.

The next few days could be crucial because a valid breakout from the descending pitchfork’s body, it will confirm a potential upside movement. However, a valid breakdown below the 50% Fibonacci line of the ascending pitchfork it will announce a further drop.

USD/CAD has found a temporary resistance on the H1 chart and now could drop towards the median line (ml) again. It has failed to stabilize above the upside 50% Fibonacci line, so a minor drop it could be natural after the impressive bullish momentum.

Maybe it will retest the median line (ml) before will jump higher. Only a valid breakdown below the median line it will announce a further drop. A failure to reach the median line (ml) it will send the rate higher aggressively.