CAD has taken full control. thi is likely to drive the pair towards new lows. The USDX's current drop due to the US Presidential Election weakens the dollar. USD/CAD failure to make another higher high confirms a deeper drop.
The bias is bearish despite a temporary, short-term, rebound. USD would drop even if yesterday's manufacturing data had beaten expectations. Unfortunately, the greenback could lose more ground as traders are expecting more stimulus measures announced by the FED.
USD/CAD Downside Breakout!
You can notice that the rate failed to reach and retest the median line (ml) of the ascending pitchfork signaling high selling pressure. USD/CAD is traded under the S1 (1.3160) level, the next downside target is seen at the lower median line (lml) of the ascending pitchfork.
It remains to see what will really happen after the current week. The USDX was somehow expected to develop a medium to long-term upside movement, but the sentiment could change after the FOMC, NFP, etc.
- USD/CAD Conclusion
The most recent aggressive breakdown through the S1 (1.3161) signals a deeper drop. Still, the sell-off could bring a temporary rebound in the short term. That's why we have to wait for a new lower low, drop, and close under 1.3081, or for a valid breakdown below the lower median line (LML) before selling again.
The S3 (1.2893) and the 150% Fibonacci line could be used as downside targets.
