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USD/CAD rallies as the USDX has managed to rebound in the current session. The pair is trading at 1.3477, far above the 1.3315 yesterday's low. A USDX's further increase will force the currency quote to climb way higher in the weeks to come.
As you already know, the Federal Reserve maintained the Federal Funds Rate steady at 0.25% in yesterday's monetary policy meeting, sustaining that they will use all available tools to fight the COVIS-19 effects.
USD/CAD has found support right on the 78.6% retracement level, has developed a pin bar, and now is trading in the green again. The pair has made only a false breakdown with great separation below the 1.3347 static support, so a strong bullish candle could announce a bullish momentum and a bullish reversal.
The price approaches the 1.3487 former high, another higher high, and consolidation above the median line (ML) of the major orange descending pitchfork could bring a buying opportunity.
The bearish pressure is still high, USD/CAD could drop anytime again if the USDX resumes its downside movement, but we may have an important rebound on this pair if the price will consolidate above the median line (ML) and above the 1.3347 level.
I've drawn an ascending pitchfork (black) hoping that I'll catch the next leg higher, so a retest or a false breakdown with great separation below the lower median line (lml) and below the 1.3347 will suggest buying.
USD/CAD will resume its downside movement if it stabilizes below the median line (ML), and if it makes another lower low, to drop and close below the 1.3315 level, the next targets are see at the 88.6%, and lower at the 100% levels.
Technically, yesterday's pin bar, false breakdown with huge separation below the 1.3347 level, and below the 78.6% has signaled a potential reversal after the major drop. As I've said earlier, we may have a great long opportunity if USD/CAD comes back to retest the 1.3347 and the lower median line (lml), if it registers a false breakdown with huge separation. The median line (ml) of the black ascending pitchfork could attract the pair if it stays within the ascending pitchfork's body.
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