USD/CAD bearish non-volatile trend has taken the price towards 1.21 level recently and now we can see some corrective structure showing some evidence to push the price higher again. CAD has been very powerful in light of upbeat economic reports after the rate hike which did make CAD resilient to USD for last few weeks. Recently this week, Canada's Housing Starts report was published with an increase to 223k from the previous figure of 222k which is expected to decrease to 216k. However, despite the positive report CAD is currently struggling to withstand the bearish pressure which does indicate that counter bullish move is on the way. On the other hand, USD is also quite positive amid solid economic reports this week which lead to a better competition with CAD in its impulsive growth. Today, US PPI report is going to be published which is expected to show an increase to 0.3% from the previous negative value of -0.1%, Core PPI is expected to increase to 0.2% from the negative value of -0.1%, and Crude Oil Inventories are expected to decrease to 4.1M from the previous figure of 4.6M. The US reports today are widely expected to reveal upbeat figures, whereas any better than expected report is going to push the USD price higher against CAD and show some good counter move along the way. Though CAD has been quite strong amid the positive market sentiment, USD is now following it to gain ground through the positive economic reports, resulting in growing demand for the US currency.
Now let us look at the technical chart. The price has recently bounced off the support area of 1.21 which also showed a bullish engulfing candle pattern yesterday as well. The price is currently expected to show some rise towards the 1.2410 resistance level where the dynamic level 20 EMA resistance resides. As the price remains above the 1.21 support area with the daily close, the bullish bias is likely to continue further.
