The currency pair dropped and resumed the yesterday’s massive drop. It also dropped because the USDX has decreased a little today. The dollar index is trading in the red and most likely will close the day below a very important resistance level.

USDX is losing the bullish momentum and he needs strong support from the United States economic data, otherwise, the rate will drop again and will force the greenback to depreciate versus all its rivals. USD/CAD drops like a rock even if the USDX has squeezed in the last hours. The pair is going down after the failure to stay above a dynamic obstacle and now should reach fresh new lows.

The USD is losing ground versus the Loonie also because the US data have come in mixed, it has received support only from the ADP Non-Farm Employment Change has come in better than expected, at 241K jobs, beating the 208K estimate and was almost to reach the 246K in the former reading period. Unfortunately, the ISM Non-Manufacturing PMI decreased from 59.5 points to 58.8 points, much below the 59.0 estimate, the Final Services PMI dropped from 54.1 to 54.0 points, even if the traders have expected to see an increase to 54.3 points, while the Factory Orders increased only by 1.2%, less versus the 1.7% estimate.

The USD/CAD dropped as much as 1.2757 and is expected to drop much deeper in the upcoming days after the failure to stay above the upper median line (uml) of the red ascending pitchfork. You can see that the rate drops after the retest of the upper median line (UML) of the descending pitchfork and technically it is somehow expected to drop towards the median line (ml) of the red ascending pitchfork. Only a comeback above the UML will signal a potential larger increase.