The USD/CAD has increased sharply in the previous hours, has edged higher as the Canadian data have come very poor, the Loonie has taken a hit today and is decreasing versus all its counterparts, could drop much deeper in the coming days. The USD has increased versus the Loonie also because the US dollar index has rebounded today, the USD/CAD could jump much higher if the USDX will reach new highs in the coming days, however, we still need a confirmation that the pair will increase further, because this momentum could be only temporary.
The Canadian Retail Sales have disappointed today because have dropped by 0.1% in June, even if the traders have expected to see a 0.5% growth, moreover the Core Retail Sales have fallen aggressively in June, by 0.8%, when everyone was expected to see a 0.3% growth, the economic indicator has plunged by 1.6% compared to 0.8% growth from May. The Consumer Price Index has come worse as well, has dropped by 0.2%, the estimate was 0.0%, while the Core CPI has remained steady at 0.0% growth, has come in line with expectations, but has failed to help the Loonie to stay higher.
Today we didn’t had any significant economic data from the United States, the US dollar has increased a little versus all its counterparts, but remains to see if this rebound was temporary or we’ll a broader upward movement, personally I’m waiting for a confirmation that the USD will increase again, I’ll keep an eye on the US dollar index, which has found strong support after the yesterday’s massive drop and now is erasing the yesterday’s losses.

The short term decrease was expected after the price has escaped from the ascending pitchfork’s body, the rate had lost the bullish momentum and the sellers have taken the lead, the rate has decreased inside of a short descending pitchfork till today when the buyers have win the battle, the rate has increased significantly and have erased the yesterday’s losses, could climb much higher in the coming days and could approach the upper median line (uml) of the short descending pitchfork and also the 23.6% retracement level, actually the price coud be attracted by the confluence area formed at the intersection of the 23.6% retracement level with the upper median line (uml) of the descending pitchfork. The perspective remains somehow bearish as long as the rate is trapped inside the descending pitchfork, the current rebound could be only temporary, the sentiment could change only if the rate will escape from the descending pitchfork’s body.

I’be drawn a minor ascending pitchfork on the H4 chart to understand better the price action, the rate has jumped above minor median line (ml), but he could find temporary resistance at this level, if this scenario will take shape, then than the rate will decrease to retest the minor lower median line (lml) before will resume the bullish momentum, however if the rate will close above the previous high and will manage o stabilize above the median line (ml) then rate rate will edge higher.

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