USD/CAD edges lower after the release of the Canadian data. The Loonie is strongly bullish even if the economic data have come in mixed. Price is trading in the red, despite that the USDX stays near the 93.50 psychological level. USDX has rebounded today, but is still trapped below some important resistance levels, a larger rebound will be confirmed only after a valid breakout above the 93.81 horizontal resistance. The USD/CAD drop is natural after the failure to reach and retest a major dynamic resistance.

USD/CAD is seeking for strong support on the Daily chart, could approach the 1.2460 horizontal support in the upcoming days. An accumulation above this level will signal a broader increase, right now is important to see if the behavior will really change (higher lows).

The Loonie rallies as the Canadian Core Retail Sales have increased by 0.7% in June, beating the 0.0% estimate and compared to the 0.1% drop in May, the currency ignored the Retail Sales report, unfortunately, the indicator increased only by 0.1%, less compared to the 0.2% estimate and versus the 0.5% growth in the former reading period.

The greenback is losing ground as the US HPI increased only by 0.1%, less versus the 0.5% estimate and compared to the 0.4% growth in the former reading period.

Price increased in the morning, but the sellers were very strong and have taken the lead again. You can see that is pressuring the 50% retracement level, but remains to see if will make a valid breakdown. The current retreat is natural after the failure to reach and retest the median line (ML) of the major descending pitchfork. Could retest the 1.2460 horizontal resistance level and the lower median line (LML) of the major ascending pitchfork.

I’ve added the black ascending pitchfork hoping that I’ll catch another leg higher. A retest of the LML will confirm the pitchfork and potential upward swing towards the median line of the black ascending pitchfork. Only a breakdown below the LML will open the door for more declines in the upcoming period.