The USD/CAD increased today and is struggling to resume the yesterday’s bearish candle, is approaching the 1.3256 yesterday’s high. This upside movement could be only temporary as the rate is trapped below some important resistance levels (support turned into resistance), remains to see how wil react when will touch and retest these levels. Has increased as the dollar index is trading in the green and is trying to take out the major resistance from the 97.59 static resistance, has climbed above this level, but we still need a confirmation that will increase further in the upcoming period.
A larger USDX’s rebound will help the USD to dominate the currency market again on the short term, remains also to see how will react after the release of the US and Canadian data, the fundamental factors will take the lead and will move the pair, so you should be careful not to suffer a heavy loss.
The Canadian Wholesale Sales could increase by 0.5% in April, could increase further after the 0.9% growth in the previous reading period. On the other hand, the greenback could take a hit from the United States Current Account if the indicator will decrease more than expected, is expected to drop from -112B to -124B.
Has found strong support right above the 150% Fibonacci line (ascending dotted line) and now is very close to reach and retest the lower median line (lml) of the minor ascending pitchfork. I’ve said in another article that the rate could climb again to reach and retest the confluence area formed at the intersection between the upper median line (UML) of the major descending pitchfork and the lower median line (lml) of the minor ascending pitchfork, as you already know, the confluence is acting as a magnet, a breakout through this confluence will confirm a major increase, but a rejection will bring us a very good selling opportunity.
We’ll have a larger bullish movement if the rate will jump and will stabilize above the upper median line (UML) of the descending pitchfork and if will stabilize within the ascending pitchfork’s body.