USD/CAD Bounces Off Weekly Lows After ISM PMIs

The USD/CAD currency pair on Thursday bounced off the current weekly lows of about 1.2762 to rally towards 1.2850 after the latest round of US ISM data. The currency pair appears to have recently pulled back after hitting a new yearly high of 1.2879.

The pair continues to trade within a slightly ascending channel formation in the 60-min chart. Thursday’s pullback prevented the currency pair from crossing to overbought levels of the 14-hour RSI. It remains pinned above the 100-hour and the 200-hour SMA lines.

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 Wednesday, the US ISM Services PMI for January beat the expectation of 56.8 with 58.7. The ADP employment change for January outperformed the expectation of 49k with 174k. The Markit Services PMI and the PMI composite also outshone expectations.

On Thursday, the initial jobless claims for the week ending January 29 beat the expectation of 830k with 779k. The continuing claims for the preceding week also outperformed the expectation of 4.7M with 4.492M. Factory orders for December beat the expected (MoM) change of 0.7% with a change of 1.1%.  Preliminary unit labor costs for Q4 also outperformed 3.9% with a change of 6.8%.

In Canada, the Markit Manufacturing PMI for January missed the expectation of 57 with 54.4.

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

Technically, the USD/CAD currency pair appears to be trading within an ascending channel formation in the 60-min chart. This indicates a significant short-term bullish bias in the market sentiment. The pair recently pulled back to avoid crossing to overbought levels of the 14-hour RSI.

The bulls will be targeting short-term rebound profits at around 1.2850 or higher at 1.2880. On the other hand, the bears will look to pounce on profits at around 1.2790 or lower at 1.2760.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair appears to be attempting a bullish breakout from a sharply descending channel formation. This indicates an attempt by the bulls to take long-term control of the pair.

The bulls will be looking to extend the current rebound towards 1.2990 or higher to 1.3180. On the other hand, the bears will look to pounce on potential pullbacks at around 1.2630 or lower at 1.2420.

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