The USD/CAD has decreased significantly today and has resumed the yesterday’s bearish candle, has touched new lows, but has squeezed in the last few hours. The rate has recovered a little after the United States economic data were released, remains to see what will happen in the coming period as the rate continues to move sideways.
The currency pair could develop a triangle chart pattern, we’ll have a clear direction only when the rate will breakout from the minor consolidation movement. Technically was somehow expected to increase on the short term, but unfortunately has failed to jump above the 1.1.3211 previous high, has failed also to take take out an important dynamic resistance and now is seeking for support again, is expected to come down to challenge some important support levels.
The USD has decreased and has lost significant ground versus the Loonie as the USDX has failed to make new highs, has found temporary resistance right below the 101.78 previous high and now is trading near the 101.00 psychological level after the impressive drop registered in the European trading session.
Personally, I believe that the rate will move sideways on the short term because I don’t believe that will have enough energy to make a larger movement at this moment.
The dollar has decreased again after the US data were published, the New Home Sales have increased from 535K to 555K, but the indicator has failed to reach the 575K estimate, while the Revised UoM Consumer Sentiment has increased from 95.7 to 96.3 points, exceeding the 96.1 estimate. Moreover the Revised UoM Inflation Expectations rose by 2.7% in February, but less compared to the 2.8% growth in January.
The Loonie could increase as the CPI has come better today, the indicator has increased by 0.9% in January, more than the 0.3% estimate, has increased significantly after the 0.2% drop from December, while the Core CPI rose by 0.5%, even if the economists have predicted a 0.1% drop. The Statistics Canada has released also the Trimmed CPI, Median CPI and the Common CPI.

USDCADdaily-1

The rate has dropped and has ignored the support from the third warning line (wl3) of the former ascending pitchfork, could drop to test and retest the median line (ML) of the major descending pitchfork, where he could find support again. Could find support also at the 23.6% retracement level, the current drop is somehow natural after the failure to reach the upper median line (uml) of the minor descending pitchfork. Price could bounce break from the mentioned support levels and could try to escape from the descending pitchfork's body as the behavior has changed on the short term when has started to make higher lows. However, a drop below the median line (ML) and below the 23.6% retracement level will open the door for more declines.

USDCADh4-1

You can see on the H4 chart that the rate is moving sideways, maybe will be better to stay away from this pair till we'll have a clear direction, right now we don't have a trading opportunity.

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