USD/CAD edges higher as the Dollar Index has managed to grow even if the Unites States economic data have disappointed earlier. The pair has rebounded after reaching a strong support zone. It could approach and reach important upside obstacles as long as the Dollar Index resumes its rally.
The Canadian GDP increased by 0.7% in June matching expectations. This was expected to be good for the Loonie after the 0.5% drop registered in May. On the other hand, the Chicago PMI dropped from 73.4 to 66.8 points, below the 68.0 estimates, while the CB Consumer Confidence registered an unexpected decline from 125.1 to 113.8, the specialists have expected drop only to 122.9 points.
The greenback has rallied after the ECB's Knot comments that European Central Bank could reduce its stimulus.
USD/CAD Amazing Rally Despite Poor US Data!
USD/CAD has found support on the 1.2590 again and on the median line (ML). Now it has bounced back, the first immediate resistance, upside target is seen at 1.2673 weekly pivot point. It remains to see how it will react after reaching this level.
Technically, only a new lower low, a bearish closure below 1.2569 today's low would have signaled a larger downside movement. It is in a neutral zone, we'll have to wait for consolidation before considering going long.
Forecast!
Making a valid breakout through 1.2708 high could signal a strong growth towards the descending pitchfork's upper median line (uml).
A selling opportunity could appear if USD/CAD drops below the median line (ML) and if it closes below 1.2569 low.
The material has been provided by InstaForex Company - www.instaforex.com