The USD/CAD has edged higher aggressively today as the greenback has received a helping hand from the USDX, the index has managed to increase in the second part of the day and to erase the morning gains. The USD has rallied even if the United States economic data have come in mixed, unfortunately the USD/CAD rebound could be only temporary as the USDX remains under massive selling pressure on the short term.
The USDX has increased a little and has reached the 100.48 level, where has found resistance again, but now has lipped lower again, could approach the 99.84 static support in the start of the upcoming week, could take out this downside obstacle and could hit fresh new lows, we have another important support at the 99.24 level. A USDX’s further drop will force the USD to depreciate further versus the other major currencies.
The Loonie has decreased in the last hours eve if the Canadian Manufacturing Sales have increased by 0.6% in January, the sales have increased for the third consecutive month, has surged less versus the 2.1% growth in the previous reading period.
The rate has increased considerably today and has resumed the yesterday’s bullish candle, the rebound was somehow natural after the false breakout below the median line (ml) of the ascending pitchfork, the rate has closed right above this level, signalling a rebound.
Price has increased, but has found strong resistance again above the first warning line (wl1) of the former descending pitchfork, a rejection from here will send the rate tumbling on the short term.
The USD/CAD should resume the if will take out the support from the median line (ml) of the ascending pitchfork, could drop as the USDX could reach new lows in the coming week. We could have a selling opportunity if the rate fallen below the mentioned support level and if will come back to test and retest the confluence area formed at the intersection between the WL1 with the median line (ml) of the ascending pitchfork and with the 38.2% retracement level and the wl1, the next major downside target will be at the lower median line (lml).