USD/CAD has managed to increase today and to climb above the 1.2882 yesterday’s high. Technically, the rate was somehow expected to drop further on the short term, but it has failed to stay below a critical dynamic support.

USD increased versus the Loonie as the USDX has managed to increase. USD/CAD is trying to close the gap down and to reach and retest a dynamic resistance (support turned into resistance). Price is trapped within a down channel, so the perspective remains somehow bearish despite this rebound.

It is really important to see what will happen on the USDX in the upcoming period because if the index will increase, then the pair should increase as well on the short term.  The USD received support from the US economy again today, the Unemployment Claims decreased from 2015K jobs to 207K in the previous week, even if the specialists had expected a decrease only to 214K, while the Factory Orders increased by 2.3%, more versus the 2.2% estimate. Unfortunately, for the Loonie the Canadian Ivey PMI  decreased from 61.9 points to 50.4 points, much below the 62.3 estimate.

Price has made another false breakdown below the 50% Fibonacci line of the descending pitchfork and now it is almost to reach the 50% line of the ascending pitchfork. It is still trapped between the upper median line (uml) and the 50% line of the descending pitchfork. So, the perspective remains bearish as long as the rate is trapped within this pattern. I’ve told you in the last week that a valid breakdown below the 50% line of the ascending pitchfork will signal a further drop, but only a valid breakdown below the 50% line of the descending pitchfork will signal a drop towards the median line (ml) of the descending pitchfork.  Personally, I believe that a valid breakout above the upper median line (uml) will signal a potential rebound.