Forex Trading: USD/CAD is this a false breakout April 26, 2018

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The pair rallied aggressively in the last days and has managed to reach a very strong resistance area. The greenback increased sharply as the USDX has managed to increase and to climb above the 91.00 psychological level.

It remains to see what will really happen with the Loonie, a minor drop is somehow expected after the impressive rally. However, a valid breakout will send the rate much higher in the upcoming period.

USD/CAD decreased a little today and resumed the yesterday’s US session drop. You should be careful because the United States data will shake the market in the US session.

The Core Durable Goods Orders are expected to increase by 0.5% in March, but less versus the 1.0% growth in February, while the Durable Goods Orders could increase by 1.6%, less compared to the 3.0% growth in the former reading period. Moreover, the Unemployment Claims could decrease again, from 232K to 230K in the previous week, the Goods Trade Balance could increase from -75.9B to -74.8B, while the Prelim Wholesale Inventories are expected to increase by 0.6% in March, less versus a 1.0% growth in February.

The rate has made a false breakout above the upper median line (UML) of the major descending pitchfork and above the upper median line (uml) of the minor ascending pitchfork. A false breakout will send the rate towards the 50% Fibonacci line (ascending dotted line).

However, a valid breakout will confirm a further increase. Resistance could be found at the 150% Fibonacci line ad at the outside sliding parallel line.

Actually, the rate could be attracted by the confluence area formed between the sliding line (sl) with the 150% Fibonacci line.

We’ll see what will happen because the rate will be driven by the fundamental factors on the short term. The current rebound was expected after the failure to reach and retest the median line (ml).

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