The price changed little today and maybe the traders will wait for the Canadian economic data to bring life on this pair. The pair increased in the last two days as the USDX has managed to jump towards fresh new highs.

USD/CAD is trading right below some very important short-term resistance levels. I’ve said in the previous analysis that we may have a minor rebound, but this could be only temporary. The rate remains under some pressure because is trapped below some very important resistance levels.

It will be very important what will really happen on the USDX because the current rebound could be temporary as well. The dollar index increased and is almost to reach a very important resistance level and probably will slip lower again in the upcoming days.

The Canadian data will shake the market today. The CPI may increase by 0.4%, less versus the 0.6% in the former reading period, while the Core Retail Sales could increase only by 0.4% in February versus a 0.9% growth in January. The Retail Sales are expected to increase by 0.4% in February, more versus the 0.3% in January.

The rate bounced back and failed to reach and retest the median line (ml) of the red ascending pitchfork. USD/CAD made a false breakdown below the 61.8% retracement level, and now is almost to reach the 50% Fibonacci level. Price has touched the 50% Fibonacci line (ascending dotted line), but only a valid breakout above will signal a further increase on the short term.

A larger upside movement will take shape only if the rate will make a valid breakout above the upper median line (UML) of the major descending pitchfork. A failure to climb above the UML will signal another leg lower on the short term, a breakdown below the median line (ml) will be favored.