USD/CAD rallies and extends its yesterdays bullish candle as the USD was boosted by the USDXs rebound. The pair is challenging a major downtrend line, so only a valid breakout will suggest buying and will announce a reversal.To get more news about WikiFX, you can visit wikifx news official website.
The price is strongly bullish right now, but it remains to see what will really happen after the US and the Canadian data will be released. The Canadian Employment Change is expected around 700.0K in June, versus 289.6K in May, while the Unemployment Rate could drop from 13.7% to 12.0% in the last month, worse than expected figures will push the USD/CAD way higher.
On the other hand, the US is to release the PPI is expected to increase by 0.4%, while the Core PPI could increase by 0.1% after the 0.1% drop in the previous reading period. You should be careful during the economic data release because the volatility will be high.
Still, if the Canadian data will disappoint and the US data will come in line with expectations, USD/CAD will be expected to resume its current rebound. The pair could drop again in the short term if the Canadian figures will beat expectations.
● USD/CAD Breakout Attempt!
USD/CAD has registered only a false breakdown below the PP (1.3564) level and now has jumped above the major downtrend line and above the 61.8% Fibonacci level. A valid breakout above these levels will announce a larger increase and a potential reversal.
You can see on the Daily chart that USD/CAD has developed a pin bar on June 10, 2020, false breakdown with great separation below the lower median line (LML) of the major ascending pitchfork and below the 1.3356 level, this formation has signaled that we could have a reversal on this pair as long as the price stays within the ascending pitchforks body.
USD/CAD is trapped between the lower median line (LML) and the inside sliding line (SL), the failure to come back to retest the lower median line (LML) indicates strong buyers and a potential rally towards the sliding parallel line (SL).
The currency pair could move higher within this up channel, between LML and the SL, but I believe that a valid breakout above the downtrend line could bring an upside breakout from this channel as well, above the SL and above the R1 (1.3810).
A reversal, another leg higher, could be invalidated if USD/CAD will make only a false breakout with great separation above the downtrend line, this scenario could send the rate back towards the lower median line (LML) of the major ascending pitchfork.
● USD Bulls In Full Control on H4
USD/CAD has broken above the upper median line (uml) of the minor descending pitchfork as well, so a valid breakout from this pitchfork and above the downtrend line will signal a further upside movement, the first target will be at the sliding line (SL).
A false breakout above the mentioned lines will keep the pair within the minor down channel between the upper median line (uml) and the median line (ml) of the minor descending pitchfork in the short term.