The USD/CAD pair rallied in the short term and now is located at 1.3379 at the time of writing, far above 1.3314 today's low. DXY's rally boosted the greenback, which took the lead versus its rivals. Still, an upside reversal needs confirmation.
Fundamentally, the USD/CAD pair took a hit from the Canadian economic data on Friday. Unemployment Rate jumped from 5.0% to 5.2% above 5.1% expected, while Employment Change was reported at -17.3K compared to 21.2K estimated.
Tomorrow, the US CPI and Core CPI should really shake the markets. The volatility could be high, so the currency could register sharp movements in both directions. Higher inflation could lift the USD.
USD/CAD Bullish Momentum!
USD/CAD found strong support on 1.3314 and now it has rallied. It has registered only false breakdowns signaling an oversold situation. Now, it has jumped above the S1 (1.3370) and was almost to hit the 1.3380 former high.
Personally, I've drawn an ascending pitchfork, the lower median line (LML) represents a dynamic support. As long as it stays above it, USD/CAD could develop a new leg higher.
USD/CAD Outlook!
A valid breakout above 1.3387 activates further growth and represents a bullish signal.
