USD/CAD posted humble gains today and most likely is waiting for another helping hand from the United States economy. As you already know, the greenback rallied after the yesterday’s positive US data.
Price increased little as the USDX has decreased today and failed to climb towards the 93.91 yesterday’s high. The dollar index found temporary right below the 93.81 static resistance, much below the 94.00 psychological level, so a minor decrease could come. I’ve said in the previous days that the index could move sideways because only an accumulation will help the rate to accumulate enough energy for a broader rebound.
We have a throwback underway on the USD/CAD, technically, is expected to increase further in the upcoming period because is attracted by some resistance levels that act as a magnet.
The rate will be driven by the fundamental factors in the upcoming hours, the Canadian Housing Starts could drop from 213K to 204K in the previous month. Moreover, the Building Permits could drop by 1.8% in June, actually could plunge after the 8.9% growth in the former reading period. You should be careful because the US will release high important data as well.
Price has taken a break right above 1.2655 broken static resistance, maybe will try to consolidate the latest gains before will resume the upward movement. Maybe needs to recapture more directional energy before will jump much higher.
USD/CAD will approach and reach the median line (ML) of the red descending pitchfork only if the US data will impress and the Canadian will disappoint today. Resistance can be found also at the upside line of the descending channel and higher at the 1.2803 static resistance. Continues to be under some pressure as long as is trapped below these levels. As you already know, the current rebound was expected after the major drop and after the failure to reach the lower median line (LML) of the red descending pitchfork.
Another leg lower could come from the median line (ML) and from the upside line of the descending pitchfork.