USD/CAD moves sideways in the short term waiting for a bullish spark to be able to develop a new leg higher. Technically, the pair has shown oversold signs, but it is still premature to go long from here.
The US needs strong support from the US economy to start increasing versus its rivals. The US ISM Services PMI, Unemployment Claims, and the ADP Non-Farm Employment Change could shake the markets today. Also, don’t forget that the US is to release the NFP, Unemployment Rate, and the Average Hourly Earnings tomorrow.
Better than expected data could boost the DXY and could lift the greenback in the short term.
USD/CAD H4 Technical Analysis
USD/CAD is trapped between the weekly pivot point (1.2079) and the S1 (1.2017) levels. Its false breakdown with great separation below the S1 signaled a potential growth.
Still, we have to wait for a valid breakout above the weekly pivot point (1.2079) and for the price to make a new higher high before taking action. The price action has developed several falling wedge patterns here in the short term, signaling a potential reversal.
Conclusion!
USD/CAD has shown oversold signs after registering a sharp drop. The USD could take the lead if the US data comes in better than expected.
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