FX.co ★ USD/CAD more declines in view

The USD/CAD pair is trading in the red at 1.2795 far below 1.2834 today's high. In the short term, the bias is bearish, so a further drop is in cards. The Dollar Index's (DXY) sell-off forced the USD to depreciate versus its rivals. The currency pair erased some of yesterday's gains, a new lower low could activate a deeper drop.

Today, the US economic data came in mixed, weakening the greenback. The Goods Trade Balance dropped unexpectedly lower from -83.2B to -97.8B below -89.0B, while the Pending Home Sales dropped by 2.2% even whereas experts predicted a 0.6% growth.

USD/CAD in sellers' territory

The USD/CAD pair is heavy after failing to stay above the Ascending Pitchfork's median line (ML). It has failed to retest the median line in the last attempts signaling strong sellers.

It has also failed to retest the weekly pivot point of 1.2854, so a deeper drop towards the weekly S1 (1.2745) is somehow expected. If the Dollar Index resumes its drop, USD could depreciate further.

USD/CAD outlook

In the short term, the USD/CAD pair is trapped between 1.2836 and 1.2778 levels. A valid downside breakout, a new lower low could signal a deeper drop towards the weekly S1 (1.2745). The 50% Fibonacci line of the Ascending Pitchfork represents a downside target as well.