The USD/CAD pair developed a leg higher as the Dollar Index managed to rebound. It was trading at 1.3646 at the time of writing above 1.3627 today's low. It has dropped in the last hours but the bias remains bullish in the short term.
Fundamentally, the pair jumped higher even if the Canadian GDP rose by 0.1% versus the 0.0% growth expected on Friday. On the other hand, the US data came in mixed. The CAD lost some ground after the BOC increase the Overnight rate from 3.25% to 3.75% even if the traders expected a 75bps rate hike.
Today, the USD took a hit from the Chicago PMI which came in at 45.2 points below the 47.8 points expected. Tomorrow, the Manufacturing PMI could be reported at 49.9 points above 49.8 in the previous reporting period. On the other hand, the US ISM Manufacturing PMI and the JOLTS Job Openings area are seen as high-impact events and could drive the price.
USD/CAD Up Channel!
Technically, bias remains bullish in the short term as long as it stays above the uptrend line. 1.3626 and 1.3606 represent downside obstacles as well. Testing and retesting these levels, registering only false breakdowns may signal new bullish momentum.
Only a valid breakdown below these levels and below the uptrend line may invalidate the bullish scenario and could open the door for a deeper drop.
USD/CAD Forecast!
A valid breakdown below 1.3606 and through the uptrend line activates a potential drop towards the previous lows, down to 1.3500. This is seen as a short opportunity.
False breakdowns through the support levels could signal an upside continuation. Jumping and stabilizing above 1.3656 and making a new higher high brings new long signals.
