FX.co ★ USD/CAD downside seems over

The USD/CAD pair rebounded after registering a massive drop. USD took the lead as the US dollar Index rebounded after reaching the 97.73 key level. In the short term, the price turned to the upside but a larger upwards movement is far from being confirmed.

USD/CAD could register sharp movements later today after the release of the US and Canadian economic figures. The Canadian GDP is expected to register a 0.2% growth in January versus 0.0% growth in the previous reporting period. Today, the volatility is expected to be high. Anything could happen after the US data. The Unemployment Claims could grow from 187K to 195K in the last week, while the Core PCE Price Index is expected to report a 0.4% growth.

Personal Income and Personal Spending indicators are expected to register a 0.5% growth in February, while the Chicago PMI could increase from 56.3 points to 56.9 points.

USD/CAD Fresh Bullish Momentum

As you can see on the H4 chart, the pair failed to stay below the descending pitchfork's median line (ML) signaling exhausted sellers. It also failed to reach and retest the median line in the last attempts indicating oversold.

Now, it has jumped above the upper median line (UML) which represented a dynamic resistance. The weekly pivot point of 1.2520 is seen as the first upside obstacle. Personally, I would like the rate to come back to test and retest the upper median line (UML) before extending its rebound.

USD/CAD Prediction

Coming back to tets and retesting the upper median line (UML) followed by a valid breakout above the pivot point (1.2520) could announce strong buyers and potential further growth. Strong consolidation above the pivot point could validate more gains.

A larger growth and a bullish reversal could be activated if the price makes a valid breakout above the median line (ml) and above 1.2586.