The USD/CAD has decreased little today and looks determined to approach the 1.3082 previous low, could drop even deeper if the Canadian economic data will come in line with expectations or better. The currency pair continues to move sideways on the short term, but I hope that we’ll have a clear direction very soon, remains to see the direction because the price action is developing a triangle chart pattern.

We could have some volatility today on this pair as the Statistics Canada will publish some important economic data, so you should be careful not to suffer a heavy loss. Will be better to keep an eye on the economic calendar today because the US is to release important numbers as well.

The Canadian CPI is expected to increase by 0.3% in January and could help the Loonie to appreciate further versus its counterparts, the indicator could increase again after two decreasing months, while the Core CPI is expected to decrease by 0.1% after the 0.3% drop since December. The Statistics Canada will publish also the Common CPI, Median CPI and the Trimmed CPI. The fundamental events are expected to bring a high action on this pair, we could have high volatility after data will be released.

You can see that the rate continues to move sideways on the short term, has plunged in the yesterday’s trading session after the failure to close above the 1.3188 static resistance, has decreased also because the USDX has decreased significantly. The dollar could lose more ground if the US dollar index will drop much deeper, the index is trading right below the 101.00 psychological level, a further drop will force the dollar to depreciate further versus all its rivals.

I’ve said yesterday that the rate could decrease to test and retest the lower median line (lml) of the minor ascending pitchfork, could be attracted by the confluence area formed at the intersection between the lower median line (lml) with the 1.3047 static support, where he could find strong support, we’ll have a broader rebound only if the rate will take out the dynamic support from the upper median line (uml) of the minor descending pitchfork.