USD/CAD is located at the 1.2516 level and is pressuring the R2 (1.2516) and the 78.6% level. It has increased as much as 1.2590 yesterday where it has found strong resistance. A temporary decline was somehow expected after the last rally.
DXY's rebound (US Dollar Index) helped the greenback to appreciate a little versus its rivals. USD/CAD stands above important near-term downside obstacles, so the bias remains bullish.
You should be careful today as the Canadian Employment Change and the Unemployment Rate could bring high volatility later today. The Employment Change is expected to increase to 172K after -62.8K in May, while the Unemployment Rate could drop from 8.2% to 7.8%.
Fundamentally, the Loonie could take full control in the short term if the economic figures will come in better than expected.
USD/CAD Temporary Retreat?
USD/CAD could resume its decline if it closes under the R2 (1.2516). It has failed to take out the weekly R3 (1.2582) signaling exhausted buyers and a potential decline. It has reached the second warning line (WL2) of the descending pitchfork.
Technically, a downside movement could help us to catch a new swing higher. Maybe you should stay away from this pair around the Canadian data dump. You can catch something really good later after the markets cool down.
Trading Conclusion!
Dropping and closing below 1.2506 today's low could be seen as a selling signal with a potential downside target at 1.2450.
On the other hand, staying above the R2 and jumping above 1.2556 today's high could signal more gains. A valid breakout above the WL2 could bring a great long opportunity.
