USD/CAD rebounded from 1.2495 lower low yesterday and now is traded right above 1.26 psychological level. The price reached a resistance area which could send the rate down in the short term.
Technically, USD/CAD could register a minor decline before resuming yesterday's rally. Breaking and stabilizing above 1.2650 could really indicate a bullish reversal. Still, the USD needs support from the US economy to be able to appreciate against its rivals in the coming period.
Chicago PMI, Personal Income, Personal Spending, Goods Trade Balance, Revised UoM Consumer Sentiment, and the Prelim Wholesale Inventories could lift the greenback if the figures will come better than expected.
USD/CAD Temporary Retreat?
USD/CAD edged higher after some positive US data reported yesterday. The price has found support at the median line (ML) of the descending pitchfork, right below the S2 (1.2498).
Reaching the descending pitchfork's upper median line (UML) the price was rejected. The UML and SL1 represent strong dynamic resistance levels, so a minor retreat is natural after the most recent rally.
USD/CAD remains under selling pressure as long as it stays below the UML and SL1. So, it could drop anytime if the USDX drops as well.
A good buying opportunity could be offered and signaled by a jump and stabilization above the Pivot Point (1.2650). Escaping from the descending pitchfork's body could bring a strong leg higher.
1.28 is seen as the first upside target. A broader swing higher will be confirmed by a breakout above 1.2881 high.