The currency pair was ruined by the Bank of Canada decision to hike the interest rate for the first time in the last 7 years. Price drops aggressively and looks unstoppable on the short term, has decreased more than 140 pips in the last two hours, hitting a static downside obstacle, but I’m not certain that the support could stop the bearish momentum.

Drops despite that the dollar index stays much above the 95.50 psychological level, USDX started a minor range on the daily chart, personally I hope that will be an accumulation movement so the rate to recapture more bullish energy.

The USDX looks undecided on the short term, but we could have a Falling Wedge pattern on the Daily chart as long as will stay somewhere above the 95.45 previous low.

The Loonie rallies as the Bank of Canada has finally decided to raise the Overnight Rate from 0.50% to 0.75%, matching expectations, the hike was expected by the traders, but looks like that wasn’t priced in, the minor bounce back was only temporary ahead the BOC. USD/CAD plunged aggressively after the BOC Press Conference and after the Yellen’s testimony.

You can see that has registered a huge drop in the last two hours and now is pressuring the support area near the 1.2771 level. Looks determined to drop much deeper as the fundamental factors have taken the lead on the short term.

We have an amazing drop on the daily chart, could approach the third warning line (wl3) of the former ascending pitchfork, where he could find strong demand. Technically, a rebound was favored from the median line (ML), but the fundamental factors have forced the price to hit new lows. Is strongly bearish right now, a rebound will come in the upcoming period only because could be too oversold to be able to drop further.

Support could be found also at the 1.2655 level, we’ll see if the bears will be strong enough to drive the rate towards  this level or the buyers will step in again, personally I’ll wait for a reversal signal.