The USD/CAD rallied and erased the morning losses, but remains to see if will have enough energy to make a valid breakout above an important confluence area. Price is challenging the mentioned confluence, we’ll see what will happen later because the USDX dropped despite the good United States data. However, maybe the dollar index drop is only temporary and will get back higher in the upcoming hours.

I’ve said in the today’s articles that the USDX is still under selling pressure because is located below an important dynamic resistance (support turned into resistance). USD/CAD maintains a bullish perspective on the short term as the minor uptrend remains intact.

Technically, it should climb much higher in the upcoming days because has retested some very important support level. We may have a buying opportunity in the upcoming days if the USDX will have enough energy to stay above the 93.81 obstacle.

The Canadian CPI increased by 0.1% in October, matching expectations, while the Core CPI increased by 0.3%, more versus the 0.2% growth in the former reading period, but the Loonie wasn’t impressed at all. On the other hand, the greenback stays higher as the United States data have come in better than expected.

You can see that the rate has managed to climb much higher signaling a bullish strength. Price erased the morning losses and invalidated the breakdown below the confluence area formed between the median line (ml) of the blue descending pitchfork with the black uptrend line.

I’ve said in the yesterday’s article that we may have a buying opportunity from above the 1.2803 level, so a valid breakout above the confluence area formed between the 1.2803 with the upper median line (uml) of the red ascending pitchfork.

The near term upside target will be at the 1.2916 previous high, will move towards the 1.3047 major static resistance. It could be attracted by the upper median line (UML) of the red descending pitchfork after the retest of the median line (ML).