USD/CAD dropped in the early morning invalidating the breakout through the immediate downtrend line. It could decline a little in the short term before resuming the rebound.
The Canadian Dollar remains strong after the Ivey PMI increased unexpectedly higher from 60.0 to 72.9, exceeding 62.0 expectations. The US Unemployment Claims may bring more action on USD/CAD later today.
Still, the Canadian data published on Friday could be decisive. The Employment Change is expected at 101.5K below 259.2K while the Unemployment Rate may drop from 8.2% to 8.0%.
USD/CAD Bullish Reversal Favored!
USD/CAD flirts with the immediate downtrend line. A valid breakout above it and a new higher high confirms a bullish scenario. The pair has found strong support on the downtrend line and right on the weekly S1 (1.2520).
Now, the immediate static support is seen at the weekly pivot point (1.2583). The ascending pitchfork's lower median line (LML) represents strong dynamic support as well.
Personally, I believe that jumping and stabilizing above the weekly and daily R1 (1.2639), registering a new higher high, will really validate more gains.
An H4 bullish closure above the R1 (1.2639) represents a bullish signal. The next upside target could be at the weekly R2 (1.2703).