FX.co ★ USD/CAD above major demand zone

The USD/CAD pair registered a strong downside movement but now it has reached a strong downside obstacle. It's located at 1.3527 at the time of writing above 1.3514 today's low. The downside pressure is high, so we need strong confirmation before going long again. The Dollar Index is fighting hard to jump higher after ending its sell-off. This scenario should help the USD to appreciate versus its rivals.

Fundamentally, the US Retail Sales, Core Retail Sales, PPI, and Unemployment Claims came in better than expected, while Core PPI matched expectations. On the other hand, the Wholesale Sales reported only a 0.2% growth versus 1.2% growth estimated. In the short term, the USD/CAD pair remains under pressure as the ECB increased the Main Refinancing Rate from 4.25% to 4.50%.

USD/CAD Rebound?

From the technical point of view, the USD/CAD pair is challenging the descending pitchfork's median line (ml). This stands as a dynamic support.

Also, the 1.3513 - 1.3496 zone represents a demand zone (support zone). A bullish pattern above it may announce a new leg higher.

USD/CAD Outlook!

A new lower low, a bearish closure below 1.3496 activates more declines and is seen as a selling opportunity.

On the contrary, staying above 1.3513 and making a new higher high, a bullish closure above 1.3542 is seen as a buying signal.