USD/CAD dropped after reaching the 1.2458 level and now is trading at 1.2382. The pair trading higher right now after finding demand on the weekly pivot point (1.2356). A temporary decline was expected after the most recent upwards movement.

The pair has dropped amid the broad-based strength of the US dollar. The US Dollar Index gained bullish momentum last week. Currently, the US dollar is holding the upper hand over its rival currencies. The US is due to release the Existing Home Sales and the Richmond Manufacturing Index, but I don't believe that these figures could have a big impact.

USD/CAD Upside Still Intact!

USD/CAD has found strong resistance at the first warning line (WL1) of the major descending pitchfork. Now, the sell-off was stopped by the weekly pivot point (1.2356) level.

It could jump higher as long as it stays above this level. An important growth could be validated by a valid breakout through the warning line (WL1). The bias is still bullish in the short term, despite the most recent sell-off.

Outlook!

A valid breakout above the warning line (WL1) could really signal an upwards continuation. Now it is risky to buy USD/CAD only because the immediate resistance levels are strong.

Selling here is risky because the bias is still bullish. The US Dollar could resume its growth anytime.