The USD/CAD pair rallied in the short term but now it has found strong resistance right above the ascending pitchfork’s median line (ml). Now, it has retreated and it challenges the downtrend line. The price plunged after the Canadian CPI publication. The indicator reported a 0.1% growth matching expectations, while the Core CPI reported a 0.5% growth. On the other hand, the US Building Permits came in worse than expected while Housing Starts, Capacity Utilization Rate, and Industrial Production reported better than expected data.
Technically, the USD/CAD pair jumped above the downtrend line but it has failed to stabilize above the R1 (1.2910) signaling exhausted buyers in the short term. Now, it could test and retest the downtrend line. As long as it stays above it, the price could try to resume its growth. A new higher high, jumping and closing above the 1.2933 could activate further growth. The upside scenario could be invalidated if the rate drops and stabilizes below the downtrend line.
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