The currency pair has dropped today and tries to erase the yesterday’s minor gains. The rate could resume the downside movement because is still under massive selling pressure. The USD has lost significant ground versus the Loonie as the USDX has plunged in the last days.

The dollar index is trading in the red on the daily chart and has managed to delete the yesterday’s gains. USDX is under massive selling pressure and could reach new lows, this situation will force the greenback to depreciate versus all its rivals.

The CAD received support from the Canadian data today, while the greenback wasn’t inspired by the mixed US data. The Canadian RMPI increased by 5.5%, beating the 4.0% estimate and the 3.8% growth in the former reading period, while the IPPI increased by 1.4%, more versus the 0.8% estimate and compared to the 1.1% in the previous reading period.

The USD has taken a hit from the Unemployment Claims, which have increased much more than expected, the indicator was reported at 250K in the previous week, much above the 241K estimate and versus the 247K in the former reading period. The US ADP Non-Farm Employment Change increased from 185K to 250K in December, beating the 191K estimate, while the Final Services PMI increased from 52.4 to 53.7 points, exceeding the 52.4 estimate.

The currency pair has escaped from the minor sideways movement and now is very close to hit the 1.2460 and the median line (ml) of the minor ascending pitchfork. It could be attracted by the confluence area formed between the mentioned support levels. A valid breakdown through the mentioned confluence area will accelerate the sell-off.

The rate is under massive selling pressure after the breakdown below the median line (ML) of the red descending pitchfork and below the median line (ml) of the blue descending pitchfork. Only a valid breakout above the median line (ML) will signal another leg higher.