USD/CAD posted little gains today and tries to recover after the yesterday’s minor drop. It remains to see what will really happen because the pair will be moved by the fundamental factors in the afternoon. Price has increased after another false breakdown below a very important dynamic support. The USD increased versus its rivals today as the USDX is rallying right now and it has managed to pass above two very important and crucial resistance levels.

I USDX’s further increase will force the USD to increase much more versus the other currencies. It remains to see what the BOC will bring and what impact will have on the USD/CAD.

As you already know, the BOC is expected to increase the Overnight Rate from 1.50% to 1.75%. You should be careful because the BOC Rate Statement and the BOC Press Conference could shake the market and could bring a high volatility.

The US data could bring life on the USD/CAD as well, the New Home Sales could be reported at 627K, below the 629K in the former reading period, the Flash Services PMI could increase from 53.5 to 54.1, while the Flash Manufacturing PMI could be reported at 55.4, lower versus the 55.6 in the former reading period.

USD/CAD increased after the 50% line of the ascending pitchfork retest and now is pressuring the outside sliding line (sl) of the descending pitchfork. A valid breakout it will signal a further increase towards the SL and towards the median line (ML), but as I’ve said, you should be careful because the fundamental factors could invalidate a further increase.

The sliding line (sl) represents an important resistance, the rate it is trapped between the sliding line and the upside 50% Fibonacci line of the minor descending pitchfork. Price has failed to stabilize below the downside 50% Fibonacci line of the ascending pitchfork and below the upside 50% line of the descending pitchfork, so the current upside movement is natural. A false breakout above the sliding line (sl) followed by a significant drop below the 50% line of the ascending pitchfork it will signal a further drop at least till the 50% line of the descending pitchfork.