The USD/CAD currency pair on Thursday bounced off the trendline support to recover from falling to a new 3-month low. The currency pair plummeted to trade at around 1.2354 before rallying to settle at 1.2373, later in the day.

The currency pair continues to trade within a descending channel formation in the 60-min chart. Thursday’s rebound pushed the pair back to the normal trading zone of the 14-hour RSI, after slipping to oversold conditions earlier.

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. On Thursday, the initial jobless claims for last week beat the expectation of 319k with 293k. The continuing claims for the preceding week also outshone 2.675 million with 2.593 million. However, the producer price index ex-food energy for September missed the expected (MoM) change of 0.5% with a change of 0.2%, while the (YoY) equivalent came short of 7.1% with 6.8%. The general PPI for the period also came short of expectations.

In Canada, manufacturing sales for August grew by 5% (MoM), in line with ex[pectations compared to a decline of 1.2% reported in the preceding period. 

Earlier in the week, the US consumer price index ex-food and energy matched the (MoM) expectations of 0.2%. The (YoY) equivalent also came in line with the expected change of 4%. On the other hand, general CPI grew by 5.4% Y/Y, beating the expectation of 5.3%, while the (MoM) equivalent also outperformed 0.3% with 0.4%.

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

Technically, the USD/CAD currency pair appears to be trading within a descending channel formation in the 60-min chart. However, the currency pair has recently bounced back to recover from the oversold conditions of the 14-hour RSI.

Therefore, the bulls will be targeting extended rebound profits at about 1.2398, or higher at 1.2421. On the other hand, the bears will target short-term profits at around 1.2354 or lower at 1.2333.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair appears to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.

Therefore the bears will be looking to ride the current downward movement by targeting profits at around 1.2304 or lower at 1.2243. On the other hand, the bulls will target potential rebonds at about 1.2438 or higher at 1.2508.