The USD/CAD has dropped significantly in the last two hours and has erased today’s gains, could decrease further if the US dollar index will fail to stay higher. Price has resumed the yesterday’s impressive bearish candle and now is pressuring an important static support, could reach also a strong dynamic support if will continue to drop in the upcoming hours.
The greenback is decreasing versus the Loonie even if the US dollar index has jumped much above the 100.14 yesterday’s high, the index could increase further and could approach the 100.54 static resistance in the coming days. The USDX has rebounded on the short term after the false breakout below the 99.12 static support, should climb much higher if wil have enough energy to stay above the 99.84 static support (resistance has turned into support) and above the 100.00 psychological level.

USDXdaily

I've added the USDX's daily chart to show you better what's happening with the greenback on the short term. You can see that index has found strong support right above the lower median line (LML) of the major ascending pitchfork, has increased again after the false breakdown below the median line (ml) of the descending pitchfork. The index has closed the Monday's gap down, signalling that he could increase further, could be attracted by the upper median line (uml) of the descending pitchfork, so a further increase will force the dollar to increase as well. The USD/CAD is going down right now because the USDX failed to stay near 100.23 today's high. The pair has edged lower right after the release of the United States and the Canadian data, the numbers have come in mixed, the Canadian RMPI rose by 1.2% in February, exceeding the 0.8% estimate, while the IPPI indicator increased only by 0.1%, less versus the 0.4% estimate and less versus the 0.6% growth in the previous reporting period. The USD has taken a hit from the US Unemployment Claims indicator, which has come in worse than expected, the Initial Claims have dropped from 261K to 258K in the previous week, but has failed to reach the 244K estimate, while the Final GDP surged by 2.1%, exceeding the 2.0% and the 1.9% growth in the previous reading period. The Final GDP Price Index surged by 2.1%, beating the 2.0% estimate and the 2.0% growth in the previous reading period.

USDCADdaily

You can see that the rate has plunged aggressively and has ignored the 38.2% static support and now is very close to hit the third warning line (wl3) of the former ascending pitchfork, a valid breakout below this dynamic support will attract even more sellers, which will bring more selling pressure. Is somehow expected to decrease further after the false breakout above the sliding line (descending dotted line) and after the failure to reach and retest the upper median line (UML) again in the last attempt. We could have a selling opportunity if the price will make a valid breakdown below the mentioned support and if will test and retest the 38.2% retracement level the third warning line (wl3).

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