FX.co ★ USD/CAD Melting Down Post BOC

USD/CAD has increased as much as the 1.2761 level but it has failed to stay there and now is located at the 1.2694 level. It has lost altitude as the Dollar Index has reached a static resistance level represented by 92.80.

The pair has registered an amazing rally ahead and after the BOC. As you already know, the Bank of Canada maintained its monetary policy unchanged in today's meeting. So, the Overnight Rate remained steady at 0.25%. The Ivey PMI raised unexpectedly from 56.4 to 66.0 points.

On the other hand, the US JOLTS Job Openings come in better than expected at 10.93M versus 10.03M expected and compared to 10.19M in the previous reporting period. Later, the FOMC Member Wiliams Speaks could bring more action on the USD/CAD pair.

USD/CAD False Breakout?

USD/CAD slipped back below the 1.2708 static resistance and under the weekly R2 (1.2717) level. Registering only a false breakout with great separation through these levels could signal an imminent downside movement.

In the short term, the Dollar Index could slip lower after its rally. This scenario could signal a USD/CAD drop. The pair has increased after failing to stabilize below the inside sliding line (sl) of the descending pitchfork.

Outlook!

Personally, I believe that only jumping and stabilizing above 1.2708 could signal further growth.

On the other hand, a false breakout with great separation followed by a strong bearish candle or by a retest could signal a downside move towards the median line (ml).