The USD/CAD has increased significantly in the last few days and has managed to reach fresh new highs, has reached February 2016 highs, but we still need a confirmation that will increase further on the medium and long term. Right now is challenging a major static resistance, a valid breakout will confirm that the pair will resume the long term upside movement.
The USD has appreciated further versus the Loonie even if the USDX is trading lower, the index is located below the 99.12 broken static support and the perspective is still bearish on the short term. Is very important to see what will happen on the USDX in the upcoming days, that’s why I’ve added the USDX’s Daily chart to show you better what’s happening.

The price has fallen much below the lower median line (LML) of the ascending pitchfork, but has found temporary support at the median line (ml) of the minor descending pitchfork, has failed to close below this level or right on it, signalling an exhaustion. We still need a confirmation that the index will increase again and will send the dollar higher versus its rivals, that's why we have to be patient to see what will happen, could drop any time. Maybe will decrease a little to reach the confluence area formed between the 98.57 support with the median line (ml) and with the downside line of a potential Falling Wedge, we could have a reversal from here, but a further drop will demolish the dollar. A reversal will help the dollar to dominate the currency market again. The USD/CAD has increased also because the Loonie wasn't too impressed by the Canadian data, the Retail Sales have dropped unexpectedly in February, by 0.6%, even if the economists had expected a 0.0% growth. Moreover the Core Retail Sales have dropped only by 0.1%, less versus the -0.2% estimate, but unfortunately wasn't enough to save the Loonie from downside.

USDCAD-1

The price has increased and now is approaching the 1.3625 yesterday's high, has managed to jump above the 50% retracement level, you can notice that this static resistance has represented a very strong obstacle in the last year. The breakout needs confirmation, right now is pressuring the upper median line (uml) of the minor ascending pitchfork, a failure to jump above the outside sliding line (sl) will send the rate down again and most likely the breakout above the 50% retracement level will be invalidated. The long term upside movement will resume only if the price will consolidate above the 50% retracement level. We could have also a buying opportunity if the rate will stabilize above the 50% retracement level and if will have enough energy to close above the sliding line (minor ascending dotted line). We'll have a further increase only if the USDX will have enough energy to rebound on the short term. Technically, a further increase is favored after the breakout above the sliding line (short descending dotted line from above the UML) of the descending pitchfork.

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