The USD/CAD currency pair on Thursday bounced off near current monthly lows of about 1.3234 after plunging over the last three days. The pair recently peaked to mark a new 2-month high of 1.3327 after a sustained uptrend dating back to the start of the year.
The pair now appears to have found strong resistance around the 1.3327 level which triggered the latest pullback. There could be a sustained period of declines in the coming weeks.
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 US CPI ex-food and energy for January beat the (YoY) expectation of 2.2% with 2.3%. The general CPI for the also outshone 2.4% with 2.5% but missed the (MoM) expectation of 0.2% with 0.1%.
The US initial jobless claims for the week ended February 7 impressed with 205k versus the predicted claims of 210k. On the other hand, continuing claims for the week before beat the expectation of 1.745M with 1.698M.
On Friday, traders will be looking forward to retail sales control group numbers for January with expectations pegged at 0.3%. Later in the day, preliminary readings for the Michigan consumer sentiment index for February will be out. A lower reading of 99.5 is expected down from 99.8 in the previous period.
In Canada, Housing Starts for January beat the (YoY) expectation of 210k with more than 213k. On the other hand, Building Permits for December smashed the (MoM) expectation of a 0.6% change with a 7.4% rise.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to have recently hit a key resistance zone following yesterday’s pullback. The currency pair yearly bull-run now appears to have ended amid a lack of upward momentum. This creates some interesting opportunities for the bears down below.
They will be targeting short-term profits at around 1.3234 or lower at 1.3201. On the other hand, the bulls will look to ride n today’s attempted rebound by targeting profits at around 1.3294 or higher at 1.3327.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to have hit a key resistance zone on the descending trendline. This follows the pair’s rebound at the start of the year. The pair remains relatively bearish in the long-term despite the rebound.
Therefore, the bears will be targeting long-term profits at around 1.3133, 1.2945, or lower at 1.2772. On the other hand, the bulls will look to pounce for profits at around 1.3378, 1.3554 or higher at 1.3773.