USD/CAD was into a temporary retreat after an amazing rally. The short-term decline was somehow expected, the rate has slipped lower to retest the immediate support levels before jumping higher.
The price action printed a pin bar yesterday signaling that the decrease is over and that USD/CAD should develop an important swing higher. USD edged higher after Powell's remarks at an online event hosted by the Wall Street Journal.
Moreover, the greenback received support also from the US Unemployment Claims and Factory Orders data. The economic figures beat expectations and helped the dollar to stay higher versus its rivals.
USD/CAD could give birth to a bullish reversal if NFP, Unemployment Rate, and the Average Hourly Earnings come in line with expectations, or better.
USD/CAD Bullish Momentum Favored!
USD/CAD is trapped between the descending pitchfork's upper median line (UML) and the 150% line. Yesterday's false breakdown with great separation through the UML signals that the pair could escape from this minor channel.
A valid breakout through the 150% Fibonacci line and a new higher high, passing and closing above 1.2695, could really announce a leg higher ahead. Technically, USD/CAD is still expected to develop an important swing higher after escaping from the Falling Wedge pattern.
Forecast & Tips!
A bullish closure above 1.27 psychological level suggests buying with a first upside target at 1.2835 level.
