The USD/CAD currency pair on Friday spiked to complete a channel breakout after finding a key support level. The currency pair plummeted earlier in the day after the Michigan Consumer Sentiment Index posted weak data.
The currency pair has now surged to trade above the 100-hour moving average line in the 60-min chart. Friday’s late rebound also prevented the pair from falling into the oversold conditions of the 14-day 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. On Friday, the Michigan Consumer Sentiment Index missed the expectation of 67.5 with a reading of 61.7.
Earlier in the week, the consumer price index ex-food and energy beat the expected (YoY) change of 5.9% with a change of 6%. On the other hand, the (MoM) equivalent outshone 0.5% with a change of 0.6%. The initial jobless claims for the week ending Feb. 4 beat the expected claim count of 230k with a tally of 223k, while the continuing claims missed 1.615M with a higher count of 1.621M.
In Canada, the international merchandise trade for December missed the expectation of C$2.5 billion with -C$0.14 billion. On the other hand, Imports for December increased marginally while exports decreased significantly.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair seems to have recently completed an upward breakout from a descending channel formation in the 60-min chart. This indicates an attempt by the bulls to retake control of the pair.
Therefore, they will be targeting extended rebound profits at about 1.2751, or higher at 1.2781. On the other hand, the bears will target short-term profits at about 1.2706, or lower at 1.2678.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair seems to be trading within a sideways channel formation after a recent rebound. This indicates a lack of clear directional bias in the market sentiment.
Therefore, the bears will be targeting potential downward profits at about 1.2649, or lower at 1.2562. On the other hand, the bulls will be looking for profits at about 1.2813, or higher at 1.2897.