The USD/CAD currency pair on Wednesday bounced off the 1.2520 level to surge above the 1.2544 level after the latest round of US PMIs. The currency pair continues to trade within an ascending channel formation despite the recent pullback.
The pair extended the distance above the 100-hour moving average following Wednesday’s recovery. It also moved closer to the overbought conditions of 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 the US market. The US ADP Employment Change for July missed the expectation of 695k with a job count of 330k. On the other hand, the ISM Sevices PMI for the period beat the expectation of 60.4 with 64.1. Earlier in the week, US factory orders for June beat the expected (MoM) change of 1% with 1.5%. And on Monday, the ISM Manufacturing PMI missed the expectation of 60.9 with 59.5.
In Canada, the Markit Manufacturing PMI for July came in at 56.2 slightly lower than the preceding month’s equivalent of 56.5. On Wednesday, the Canadian building permits for June beat the expected (MoM) change of 5.5% with a change of 6.9%, a significant improvement from the previous period’s change of -12.9%.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair on Wednesday continued to trade within an ascending channel formation in the 60-min chart. The pair is now trading closer to the overbought conditions of the 14-hour RSI. This indicates a significant short-term bullish bias in the market sentiment.
The bulls will be targeting extended rebound profits at approximately 1.2576 or higher at 1.2605. On the other hand, the bears will be targeting potential pullbacks at around 1.2522 or lower at 1.2495.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to have recently pulled back from an ascending channel formation. The pair now trades within a descending channel formation, indicating a significant long-term bearish bias in the market sentiment. The pair has bounced back this week to attempt a bullish breakout.
Therefore, bullish traders will be looking to build on the current rebound by targeting profits at around 1/2670 or higher at 1.2790. On the other hand, the bears will target potential pullback profits at approximately 1.2420 or lower at 1.2310.