We had some volatility on the USD/CAD today, but the rate looks undecided, is located inside an important support area, so remains to see what will happen, we have to wait for fresh trading signal before we take action.
Could drop further if the USDX will continue to decrease, the index has increased a little, but is still trapped below the 102.00 psychological level, signalling that he could slip lower. However, we may have a sideways movement on the USDX in the coming period, the rate needs to recapture more directional energy before will try to kiss new highs.
The Loonie has failed to increase significantly today because the Canadian data have come in mixed, the Building Permits have dropped by 0.1% in November, even if the economists have forecasted a 2.4% growth, the indicator has dropped again after the 10.5% growth from October, while the Housing Starts have beaten the expectations, the indicator was reported at 207K in December, higher versus the 187K estimate, has come also better than the 187K since November 2016, but the Loonie wasn’t too impressed and has failed to drag the USD/CAD pair below the 1.3188 static support.
You can see that the price has increased today to test the second warning line (WL2) of the ascending pitchfork and the 1.3251 static resistance, but has failed to stay higher and now is pressuring the median line (ml) of the minor descending pitchfork, we’ll have a great selling opportunity if the rate will fall below the 1.3188 horizontal support. The major downside target remains at the median line (ML) of the major red descending pitchfork, could still be attracted by this obstacle in the coming period, we have a major confluence area formed at the intersection between the median line (ML) with the third warning line (WL3) of the ascending pitchfork and with the 1.3047 static support, this confluence could act as a magnet and could force the price to drop deeper if the bears will have enough power to maintain the rate below the median line (ml) of the minor descending pitchfork.