USD/CAD rallied and has managed to recover after the last retreat. Price is trading in the green on the short term and is pressuring a dynamic resistance, but remains to see if will really have a valid breakout or this will be a fake out. A valid breakout above the 1.2803 will bring us a great buying opportunity, but this scenario will take shape only if the USDX will have enough energy to increase a little in the upcoming days.

The dollar index resumed the yesterday’s bullish candle and now stands above the 93.00 psychological level. USDX has retested the 92.49 static support in the yesterday’s trading session, but failed to close on it or near this level signaling that the bulls could strike back on the short term.

The dollar index closed much above a dynamic support as well and now could come to retest some very important dynamic resistance levels. USDX will make a larger increase if will have enough energy to close and stabilize above the 93.50 psychological level.

The Loonie dropped even if the Canadian data have come in better than in the previous reporting period, the RMPI rose by 3.8% in October versus a 0.2% drop in September, while the IPPI surged by 1.0% versus the 0.3% drop in the previous reporting period. Remains to see how will react after the BOC Gov Poloz Speaks.

The rate is pressuring the 1.2803 static obstacle and the upper median line (uml) of the ascending pitchfork of the minor red ascending pitchfork. A valid breakout above these levels will bring us a perfect buying opportunity.

The near-term upside target will be at the 1.2916 swing high, the major upside targets remain at the upper median line (UML) of the major red descending pitchfork and at the upper median line (uml) of the blue descending pitchfork. I’ve said in the previous week that only a valid breakdown below the ML of the major descending pitchfork will signal a further drop.