USD/CAD dropped aggressively in the short term and now it stands at 1.2558 level. The price has tested critical dynamic support and now is struggling to get back higher.
The selling pressure is high, so we have to wait for strong confirmation before going long again. The pair has plunged after the Candian data has beaten expectations on Friday. The Employment Change increased to 303.1K from 259.2K even if the specialists have expected a drop to 101.5K, while the Unemployment Rate dropped to 7.5% below 8.0% expected.
USD/CAD Retested Support!
USD/CAD has come back down after failing to stabilize above the downtrend line. Now it has retested the ascending pitchfork's lower median line (LML).
The lower median line (LML) represents critical dynamic support, dropping and stabilizing below it invalidates the upside scenario and brings a selling opportunity.
As you can see on the H4 chart, the rate has developed an Inverse Head & Shoulders pattern, but the formation is far from being confirmed. The immediate downtrend line and the R1 (1.2604) represent strong resistance levels.
A valid breakout above these obstacles and a new higher high could validate the reversal pattern and could bring a great long opportunity.
USD/CAD Outlook!
Jumping, closing, and stabilizing above 1.2611 is seen as a potential buying opportunity. Also, a valid breakout above 1.2647, a new higher high, could really confirm a new leg higher with a first important target at the median line (ML).
Dropping below 1.2523 invalidates the bullish scenario and brings a short opportunity.
