The USD/CAD currency pair on Friday pulled back of the key resistance at 1.2723 to complete a downward breakout. The currency pair has now fallen below the ascending channel formation in the 60-min chart. 

However, the pair seemed to find support from the 100-hour moving average, slightly bouncing to end the decline. As a result, the currency pair remains pinned centrally in the 14-hour RSI.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in both the US and the Canadian markets. On Friday, the preliminary Michigan Consumer Sentiment Index for December beat the expectation of 67.1 with 70.4. Earlier in the day, the consumer price index ex-food and energy for November matched the (MoM) and (YoY) expectations of 0.5% and 4.9%, respectively, while the general CPI for November outperformed the (MoM) estimate of 0.7% with a change of 0.8%. The (YoY) equivalent was in line with 6.8%.

In Canada, Capacity Utilization for Q3 missed the expectation of 83% with 81.4% on Friday. Earlier in the week, the Bank of Canada chose to keep the base interest rate unchanged at 0.25%. On the other hand, both the basic and seasonally adjusted Ivey Purchasing Managers Index for November came in at 61.2 each compared to 61.2 and 59.3, respectively, in the previous reading. International Merchandise outperformed expectations.

USD/CAD Technical Analysis (the 60-min Chart)

Technically, the USD/CAD currency pair seems to have recently pulled back to complete a downward breakout from an ascending channel formation. This indicates a significant change in the market sentiment from bullish to bearish.

Therefore, the bears will be looking to extend the current declines towards 1.2681 or lower to 1.2659. On the other hand, the bulls will be targeting potential rebounds at about 1.2723, or higher at 1.2747.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair seems to have recently bounced off the key support at 1.2631 in an attempt to return to the ascending channel formation. This indicates an attempt by the bulls to prevent the bears from taking control of the pair.

Therefore, they will be looking to extend the current rebound towards 1.2780 or higher to 1.2881. On the other hand, the bears will target long-term profits at about 1.2631, or lower at 1.2519.