USD/CAD edges higher as the Loonie was weakened by the Oil sell-off, the pair is expected to accelerate the bullish momentum and to reach fresh new highs. Technically, the price was expected to increase after it has escaped from a down channel.
Fundamentally, the Loonie is ruined by the oil massive drop, COVID-19 pandemic has reduced the global oil demand. The USD/CAD current bullish movement is somehow natural as the USDX has managed to rebound and now is targeting new highs, which makes the dollar strong versus the other currencies.
USD drives the pair higher within the orange ascending pitchfork, you can see that the USD/CAD pair has escaped from the down channel after the failure to reach the weekly S1 (1.3842) level and the 50% retracement level.
The price has come back above the Pivot Point (1.4012), it has retested this level signaling a broader increase. Now, USD/CAD is challenging the weekly R1 (1.4169) level, a valid breakout will validate a further increase, the next targets are seen at the 23.6% level, R2 (1.4339) level and at the median line (ML).
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USD/CAD has failed to retest the lower median line (LML) of the orange ascending pitchfork in the last attempt signaling a potential bullish movement towards the median line (ML). So, a consolidation, stabilization (breakout validation) above the R1 (1.4169) level will bring a potential buying opportunity because the price has made another higher high.
The median line (ML) acts as a magnet and could attract the price as long as it is located within the pitchfork's body. USD/CAD will maintain a bullish perspective as long as it is traded inside this ascending pitchfork. A further increase could be invalidated only if the price drops below the lower median line (LML).
