On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.4300 to trade at about 1.4183. The currency pair also completed a downward breakout from a descending channel formation.

The pair has since fallen to trade several levels below the 100-hour moving average line in the 60-minute chart. As a result, the currency pair is on the verge of entering the oversold conditions of the 14-hour RSI.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair trades during a relatively busy period in the U.S. market. On Thursday, the US producer price index for January exceeded the expected (MoM) change of 0.3% with a change of 0.4%. The (YoY) equivalent also beat the estimate of 3.2% with a change of 3.5%.

On the other hand, the producer price index ex-food and energy outshone the forecasted (YoY) change of 3.3% with a change of 3.6%, while the (MoM) equivalent was in line with the estimate of 0.3%. Elsewhere, the initial jobless claims for the week ending January 7 came in lower than expected with 213k versus a forecast of 215k, down from 220k in the preceding week.

Earlier in the week, the US consumer price index for January beat the expected (MoM) and (YoY) changes of 0.3% and 2.9%, respectively with changes of 0.5% and 3%. On the other hand, the consumer price index ex-food and energy outshone the (MoM) forecast of 0.3% with a change of 0.4%, while the (YoY) equivalent beat 3.1% with 3.3%. The monthly budget statement for January fell to $-129B down from $-87 billion, missing the forecast of $-88.1B. 

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

Technically, the USD/CAD currency pair has completed a downward breakout from a descending channel formation. The 14-hour RSI also supports a bearish bias as it edges closer to oversold conditions.

Therefore, the bears will look to extend the current decline towards 1.4129 or lower to 1.4066. On the other hand, the bulls will look to pounce on rebounds at about 1.4241 or higher at 1.4300.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair has completed a downward breakout from an ascending channel formation. The 14-day RSI also supports a bearish bias after pulling back to avoid rallying into the overbought conditions.

Therefore, the bears will be targeting long-term declines at about 1.3984 or lower at 1.3815. On the other hand, the bulls will look to pounce on profits at about 1.4399 or higher at 1.4581.