The USD/CAD rallies aggressively and now is pressuring a major dynamic resistance, remains to see if will have enough directional energy to breakout above it. Price is strongly bullish on the short term despite the yesterday’s drop, it should climb much higher if the USDX will rebound and will recover after the last drop.

The USD/CAD will increase further if will manage to close above the 1.3000 psychological level. Price rallied aggressively after the BOC, the fundamental factors have taken the lead and have forced the rate to erase the yesterday’s losses.

The USDX dropped significantly since Thursday, but has found a temporary support right now and could rebound.

The Bank of Canada has maintained the Overnight Rate unchanged at 1.25%, matching expectations, but the Loonie dropped sharply. The Canadian Trade Balance has come in better than expected, the deficit decreased from 3.1B to 1.9B, beating the 2.5B estimate, while the Labor Productivity rose by 0.2%, exceeding the 0.1% estimate.

On the other hand, the USD has received support from the US ADP Non-Farm Employment Change was reported at 235K in February, beating the 199K estimate, but unfortunately, the Trade Balance dropped further, from -53.9B to -56.6B, more versus the -55.1B.

You can notice that the rate has failed to retest the upper median line (uml) of the minor red ascending pitchfork and now is trying to take out the resistance from the upper median line (UML) of the major descending pitchfork. Only a valid breakout will signal a further increase, while a false breakout or a rejection will send the price down again.

Right now will be better to stay away from this pair because we don’t have any trading opportunity, but I really hope that we’ll have one very soon. Is very important what will happen with the USDX in the upcoming days.