USD/CAD bounce back? January 10, 2017

The USD/CAD has increased a little today, but remains to see if will have a larger rebound in the coming days because is still under pressure on the short term. The USD has increased in the last hours as the US dollar index has posted some gains after the earlier drop, the index has managed to climb again above the 102.00 psychological level, actually is challenging this resistance area. The USDX could move sideways on the short term before the rate will try to embrace new highs, the index has found temporary support at 101.29, could move in range or could increase again if will have enough energy to stay above this static support.
We had a poor economic calendar today, the rate was moved little by the fundamental factors, the Loonie has failed to resume the bullish momentum as the Canadian Building Permits have dropped by 0.1% in November, even if the economists have forecasted a 2.4% growth, the economic indicator has fallen after the 10.5% growth from October 2016 and have punished the Loonie, while the Housing Starts have come in better than expected, was reported at 207K, higher than the 187K estimate and higher than the 187K in the previous reading period.
On the other hand, the United States economic data have come in mixed, the JOLTS Job Openings have increased from 5.45M to 5.52M in November, but unfortunately have failed to reach the 5.59M estimate, while the Final Wholesale Inventories rose by 1.0% in November, beating the 0.9% forecast, the economic indicator has increased more versus the 0.9% growth from the former reporting period. Moreover the NFIB Small Business Index has increased from 98.4 to 105.8 points, exceeding the 99.6 prediction.

USDCADd-1

The price has increased because has found temporary support at the median line (ml) of the descending pitchfork, the rate has decreased below this level, but the bulls look motivated to push the rate higher again on the short term. Could increase again after the failure to close below the 1.3187 static support, the price is challenging the confluence area formed at the intersection between the median line (ml) and the sliding parallel line (ascending dotted line), could climb towards the upper median line (uml) of the descending pitchfork if will stay above this support area. The rate could still touch the major downside target from the second warning line (WL2) of the former ascending pitchfork, remains to see how will react then, because a drop below this downside obstacle will open the door for more declines, I want to remind you that the perspective remains bearish on the short term as long as is trading inside the descending pitchfork.

USDCADh

I've added the H4 chart to show you better the price action, you can see that we have a sideways movement, this could be a accumulation movement if the price will start to increase in the coming days, the behavior could change if the price will start to make higher lows, but we still have to wait for a confirmation that the price will increase again.