USD/CAD Consolidative Pullback Continues Towards 38.20% Fib Level

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The USD/CAD currency pair on Wednesday continued to trade in a bearish consolidative pattern formation amid a lack of momentum. The currency pair has been trading within a diving triangle pattern since the middle of last month and that seems set to continue through Friday this week.

The currency pair recently bounced off the bearish trendline support, which pushed it off oversold levels of the 60-min RSI. It also remains tagged below the 100-hour and the 200-hour SMA lines.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading in the midst of the global financial crisis amid the coronavirus pandemic. Country lockdowns continue across the globe as the US ticks above 420,000 cases of COVID-19. This pandemic has threatened to paralyze global markets. The greenback continues to suffer from the high number of cases reported in the country coupled with a string of tepid economic figures. 

Last week, the US non-farm payrolls missed expectations while the unemployment rate edged higher amid an increase in layoffs and business closures. Average wage growth benefitted from fewer jobs while the initial jobless claims for the week before ticked into tens of millions. This week, the NFIB business optimism index for March missed the expectation of 104.6 with 96.4. On the other hand, the JOLTS job openings and the consumer credit change for Feb. outshone expectations.

In Canada, the Ivy purchasing manager’s index for March missed the expectation of 41 with 26. Building Permits for February were worse than expected after declining by 7.3% versus an expected fall of 4.5%. On the other hand, Housing Starts s.a. for March beat the (YoY) expectation of 180k with 195.2k.

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

Technically, the USD/CAD currency pair appears to be trading under significant selling pressure in the 60-min chart. The pair continues to trading in a slightly diving wedge that is nearing a breakout.

The bulls will be targeting an extension of the current rebound towards 1.4200 or higher at 1.4340. On the other hand, the bears will look to pounce at around 1.3838 or lower at 1.3680.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair appears to have recently pulled back off new multi-year highs of about 1.4667. The pair is now edging closer to the 38.20% Fib level. The pullback pushed the pair back to the normal trading zone after spending some time in overbought levels of the daily RSI.

The bulls will target long-term profits at around the 23.60% Fib level at 1.4261 or higher at 1.4512. On the other hand, the bears will pounce at around 61.80% and 76.40% Fib levels at 1.3599 and 1.3381, respectively.

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