USD/CAD Upside Reversal Still Possible!

USD/CAD is trading sideways in the short term and it could try to grow if the US Dollar Index resumes its yesterday's rebound. The US ISM Manufacturing PMI registered an unexpected growth from 60.7 to 61.2 beating 60.8 points.

Moreover, the Final Manufacturing PMI increased from 61.5 to 62.1 exceeding 61.5 expected. USD/CAD retested support and now is struggling to climb higher. Still, it's premature to talk about strong growth as long as the DXY is still bearish.

The sentiment could change only if the US data continues to come in better than expected during the week. The ISM Services PMI, NFP, Unemployment Rate, Average Hourly Earnings, Unemployment Claims, and the ADP Non-Farm Employment Change could shake the markets.

USD/CAD At Support!

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USD/CAD has found strong support on 1.2012 again registering only a false breakout with great separation below it. Now the currency pair is trading in the green at 1.2077 challenging the weekly pivot point (1.2079) and static resistance.

The pair is back above the descending pitchfork's median line (ML) signaling strong buyers in the short term. Its failure to stabilize below the median line could announce a new leg higher.

Still, an upside reversal could be confirmed only by a valid breakout above 1.2144 static resistance. In the short term, USD/CAD could resume its sideways movement between 1.2012 and 1.2144 levels.

Forecast!

A valid breakout above the 1.2144 level may really announce a potential growth towards the descending pitchfork's upper median line (UML), up to 1.2250 level.

The material has been provided by InstaForex Company - www.instaforex.com

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