USD/CAD trades in the red at 1.2601 level after registering only a false breakout above the immediate resistance. Still, the decline could be only a temporary one if the USDX resumes its growth after the current retreat.
The pair is still somehow expected to increase in the upcoming period after the US CB Consumer Confidence registered an unexpected growth in March from 90.4 to 109.7 points.
We'll see how the pair reacts after the US releases the ADP Non-Farm Employment Change today and after Canada publishes the GDP. Positive US data and poor Canadian figures could boost USD/CAD.
USD/CAD Temporary Decline!
USD/CAD has managed to break above the downtrend line signaling a potential bullish reversal. Unfortunately, we still need confirmation before taking a long position on this pair.
It has found resistance at the R1 (1.2642) and now it could come back down to retest the pivot point (1.2557) and the downtrend line before resuming its upwards movement. Failing to reach these levels could bring a new bullish momentum.
Personally, I believe that a valid breakout above the R1 (1.2642) level and reaching the median line of the ascending pitchfork could signal further growth. So, registering a new higher high, closing above 1.2647 yesterday's high brings a long opportunity.
Forecast & Tips!
The decline could be a temporary one before the pair resumes its potential upside reversal. Retesting the pivot point (1.2557) or registering a false breakdown with great separation through it could bring a buying opportunity from the lows.
Jumping and closing above the R1 (1.2642) and above 1.2647 high without approaching the pivot point is seen as a bullish signal as well.
A larger growth could be signaled by a valid breakout above the median line and through the R2 (1.2713).
The material has been provided by InstaForex Company - www.instaforex.com