USD/CAD plunged and now it seems determined to approach and reach new lows in the upcoming period. It has opened with a huge gap down and has slipped below an important dynamic support (resistance has turned into support).

The rate has found a very strong resistance and now could try to test and retest the near-term support levels before it will jump higher again. USD decreased as the USDX is trading in the red today and continues to stay right above some crucial support levels.

You can see that the USDX has retested the SL1 of the former descending pitchfork and now is fighting hard to stay higher. I’ve told you in the previous week that the index will maintain a bullish perspective as long as the rate will stay above the SL1 and most important above the upside 50% Fibonacci line of the ascending pitchfork.

I’ve also said that it could try again to jump towards the inside sliding line (sl1) of the minor ascending pitchfork, which it represents a crucial resistance.  A valid breakout above this line it will really signal a further upside movement.

Price has reached the inside sliding line (SL) of the major ascending pitchfork, but it has failed to close above or on this dynamic resistance, signaling a potential downside movement. You can see that the rate has opened with a huge gap down and now is pressuring the 150% Fibonacci line. It remains to see if it will come back to try to close the gap.

The next downside targets are at the downside 50% Fibonacci line of the ascending pitchfork and at the outside sliding line (sl) of the descending pitchfork. The failure to approach and reach the median line (ML) of the major pitchfork could send the rate deeper on the short term. An important upside movement will be confirmed only after a valid breakout above the ML.