The USD/CAD pair moves somehow sideways in the short term and it continues to be undecided. The price has decreased a little in the short term only because the DXY has slipped lower from 94.30 today's high.
Despite the current retreat, the upside pressure remains high after the Canadian GDP registered 0.4% growth versus a 0.7% increase expected. On the other hand, the US data have come in mixed. The greenback was supported by the Chicago PMI which was reported at 68.4 points above 63.6 points expected, the Revised UoM Consumer Sentiment inched up unexpectedly from 71.4 to 71.7 points, while the Employment Cost Index registered a 1.3% growth versus 1.9% expected.
Furthermore, the Core PCE Price Index and the Personal Spending have come in line with expectations.
USD/CAD range
USD/CAD failed once again to reach the downtrend line and now is traded at the 1.2374 level. It moves sideways between 1.2422 and 1.2288 levels. As you can see, the pair dropped within a down-channel pattern.
In the short term, the price was somehow expected to grow after failing to stabilize under the channel's downside line and after escaping from the Falling Wedge pattern. On Wednesday, after the BOC, USD/CAD plunged from right above 1.2422 resistance.
Now, it is back below the downtrend line. Its failure to reach this dynamic resistance signals some pressure.
USD/CAD prediction
USD/CAD is somehow expected to reach the downtrend line. As long as it stays near the downtrend line, an upside breakout is imminent. Making a valid breakout above the downtrend line could announce a potential upside reversal.
Actually, a new higher high, jumping and closing above the 23.6% retracement level could activate a strong leg higher and could bring us fresh long opportunities.
The material has been provided by InstaForex Company - www.instaforex.com