The rate has finally turned to the downside after the failure to make a valid breakout above a very strong dynamic resistance. USD/CAD is trading in the red and could resume the downside movement as the USDX could decrease after the poor US data. Unfortunately, the United States figures have come in worse than expected and have forced the USD to drop versus all its rivals.

The USDX has shown an exhaustion in the last days and now it could approach and reach a crucial dynamic support.

USDX has failed to jump above the 50% Fibonacci line and it has failed to retest it in the last attempt, so it should reach the inside sliding line in the upcoming days. I’ve told you in the last days that the perspective remains somehow bullish on the Daily chart as long as the rate stays above this sliding parallel line. A valid breakdown will open the door for more declines, most likely we’ll have a breakdown below the median line (ml).  This potential scenario will ruin the USD, which it will drop versus all its rivals.

The dollar was punished by the PPI and Core PPI indicators, which have decreased by 0.1%, even if the specialists have expected to see a 0.2% growth. The Crude Oil Inventories will be released later and could bring some action on the USD/CAD as well. The Canadian Capacity Utilization Rate was reported at 85.5%, less compared to the 86.9% estimate.

USD/CAD has failed to make a valid breakout above the upper median line (uml) of the descending pitchfork and to reach the inside sliding line (SL) of the major ascending pitchfork. The next downside target will be at the downside 50% Fibonacci line of the ascending pitchfork and the second one at the upside 50% Fibonacci line of the descending pitchfork. A valid breakdown below the mentioned dynamic support lines will send the rate towards the LML.