The USD/CAD rallies on mixed US and Canadian data, has increased somehow surprisingly as the US dollar index has dropped aggressively again. The pair looks determined to hit new highs after a false breakout, maybe will be better to stay away from this pair because we don’t have a clear direction, is still trapped below major dynamic resistance, a breakout is imminent right now, but we still need a confirmation that the rate will resume the upside momentum.
Is moving somehow sideways on the short term, personally I’l wait for a fresh trading signal before I take action, the today’s rebound could be temporary if the USDX will slide further in the upcoming days. The dollar index has fallen again below the 100.00 psychological level and now is challenging the 99.84 static support, a valid breakdown will bring more selling pressure.
The pair stays higher despite that the Canadian Foreign Securities Purchases have increased from 6.35B to 38.84B, beating the 5.21 estimate. The US data have come in mixed, the Building Permits have increased from 1.22M to 1.26M in the previous month, have come in better versus the 1.25M estimate, but unfortunately the Housing Starts have fallen from 1.30M to 1.22M, have come much below the 1.25M estimate.
Price has edged higher aggressively, signalling that the bulls are still in the game, has increased sharply after the yesterday’s false breakdown below the 38.2% retracement level, now is pressuring the median line (ml) of the minor ascending pitchfork. Is still under pressure as long as is trading below the upper median line (UML) of the major descending pitchfork, technically was somehow expected to decrease further after the breakdown below the median line (ml) of the minor ascending pitchfork.
The upside movement will resume only if the rate will jump and will stabilize above the sliding line (descending dotted line), otherwise will drop much deeper in the upcoming period, a rejection from the upper median line (UML) will bring us a very good selling opportunity.
Could be attracted by the confluence area formed at the intersection between the median line (ml) with the UML, a reversal is favored from there.