USD/CAD increased after the BOC, even if the Overnight Rate was increased from 1.00% to 1.25%, matching expectations.  We’ll see what will happen after the BOC Press Conference, the event could bring a high action, so maybe we’ll be better to stay away from this pair.

The pair increased a little in the last hours as the United States data have come in better as well, we’ll see what will happen later because the US is to release more data. You should be careful because the BOC Press Conference could shake the price, a dovish speech will send the rate much higher on the short term. However, I want to remind you that the pair remains under selling pressure because is located below some very important dynamic resistance levels.

The USD received support from the US Industrial Production, which has increased by 0.9% in December, more versus the 0.4% estimate and after the 0.1% drop in the former reading period, while the Capacity Utilization Rate increased from 77.2% to 77.9%, beating the 77.3% estimate.  The US is to release the TIC Long-Term Purchases is expected to increase from 23.2B to 50.1B in November.

You can see that the rate has climbed above the median line (ml) of the minor ascending pitchfork and above the 1.2460 static resistance, but is premature to say that will stay above this line. The rate remains under pressure on the short term because is located below some very important resistance levels. The failure to reach and retest the median line (ml) of the blue descending pitchfork will signal a further drop.

A larger drop will be confirmed only after a valid breakdown below the inside sliding line (sl) of the minor red ascending pitchfork. A breakdown below the sliding line will announce a drop at least till the lower median line (LML) of the major red descending pitchfork.