The USD/CAD dropped sharply in the yesterday’s trading session, but it looks like that has found temporary support. We’ll see what will happen in the upcoming hours because the USDX is still under massive selling pressure on the short term.

USD/CAD has decreased, but this could be only temporary if a dynamic support will hold and will reject the price. It is very important to see what will really happen with the USDX in the upcoming days because is pressuring a dynamic support as well.

The rate drops again as the United States Industrial Production, Capacity Utilization Rate and the Unemployment Claims have disappointed.

On the other hand, the Canadian ADP Non-Farm Employment Change was reported at 10.7K versus a  -13.5K in the former reading period.  The USD received support from the Core PPI, which has increased by 0.4% in January, beating the 0.2% estimate, it has jumped in the positive territory after the 0.1% drop in the former reading period. The Philly Fed Manufacturing Index increased from 22.2 to 25.8 points, the traders have expected to see a drop to 21.5 points.

The TIC Long-Term Purchases will be released later and is expected to decrease from 57.5B to 50.3B, but I don’t believe that will have a significant impact.

The rate has made two false breakouts above the first sliding line (sl1) of the blue descending pitchfork, so the yesterday’s drop was natural. USD/CAD dropped significantly as the USDX has plunged and has resumed the bearish movement.

Price dropped as much as 1.2465 today, but failed to stay near this level and now is pressuring the median line (ml) of the descending pitchfork after the false breakdown below the median line (ml) of the red ascending pitchfork.

Personally, I believe that only a valid breakout above the sliding line (sl1) will confirm a further increase at least till the second sliding line (sl2). A selling opportunity will appear if the rate will slip below the median line (ml) and will test it and the ML.