The USD/CAD increased a little today and erased the morning losses, but now looks undecided because is trading right above a strong support area. Price increased a little as the USDX has managed to recover after the minor drop, but unfortunately is still located below a broken support level. Technically, the USDX could still approach and reach the 92.49 static support in the upcoming days before will give birth to another bullish momentum.
The USDX is still expected to develop an Inverse Head and Shoulders pattern, which will confirm the USD dominance.
The Loonie has taken a hit from the Canadian NHPI, which increased only by 0.1%, even if the traders have expected to see a 0.3% growth. Fundamentally, the USD should climb much higher versus all its rivals as the United States data have impressed today. The PPI increased by 0.4% in September, matching expectations, while the Unemployment Claims have dropped from 258k to 243K in the previous week, much below the 251K estimate, the indicator reached the lowest level of the last 6 weeks. Moreover, the Core PPI rose by 0.4% in the previous month, exceeding the 0.2% estimate.
Price increased after the retest of the median line (ml) of the minor blue ascending pitchfork. USD/CAD has managed to climb above the 1.2460 static support, so a false breakdown below it will signal a bullish momentum. Technically, it will ignore the dynamic resistance from the upside line of the descending channel if will reach it. I’ve said in the previous days that the rate should come down to retest the median line (ml) and the 1.2460 level before will climb higher.
USD/CAD touched the median line (ml), but will fail to close near it, signaling that the bulls are still in the game and could send the rate much higher on the short term. Only a valid breakout below the median line (ml) will confirm a further drop towards the lower median line (LML) of the major red descending pitchfork.