The USD/CAD currency pair bounced back on Wednesday morning following a short-term pullback that took the pair to 2-weekly lows. The pair remains largely on a bearish trend in the short-term although it appears to be consolidating around the 1.3300 level.

USD/CAD Fundamental Analysis

The USD/CAD is currently driven by a recent resurgence in oil prices that has seen the WTI crude oil come close to breaching the $60.00 mark. The Canadian dollar, popularly known as the loonie, relies heavily on the performance of oil prices and the rise in oil prices have given it a boost against the greenback over the last couple of weeks.

However, in recent days, the greenback appears to have pegged the decline around the 1.3300 range. In addition, with the FOMC meeting kicking off yesterday and a statement expected today, the focus appears to be switching towards the Federal reserve committee’s latest meeting. Depending on the mood of the statement, the greenback could continue to gain against the loonie.

USD/CAd Technical Analysis (the 240-min Chart)

From a technical perspective, the USD/CAD currency pair is currently pegged between the 20-period and 50-period moving average lines in the 240-min chart. This further supports the view that short-term consolidation is in progress. Nonetheless, this does not eliminate opportunities for both the bulls and the bears to take advantage of.

The bulls will be targeting opportunities at 1.3366, which based on the current exchange rate of 1.3336 would result in 30 pips of short-term profits. This level also coincides with the 50% Fib level, which makes it a good target. More profits for the bulls can be found at around the 61.80% Fib level high up.

On the other hand, the bears will look to pounce for profits at around the 38.20% Fib level, which is at around the 1.3297 level.

USD/CAD Technical Analysis (the Daily Chart)

Looking at the daily chart, the current picture appears to support a short-term bullish run, which could end in a double-top reversal pattern taking the USD/CAD currency pair back to the October 2018 lows as demonstrated using the XABCD pattern.

This reversal will highly depend on the general health of the US economy, rate hikes and from the perspective of the Canadian dollar, the performance of oil prices.

In summary, the USD/CAD currency pair appears to enjoy a bullish run in the short-term, but a reversal of this bullish recovery could occur in a few months.