The USD/CAD currency pair on Friday continued to struggle for upward momentum following the latest round of US economic data. The currency pair bounced off the trendline support around 1.3147 to top 1.3196 late on. 

However, the pair faces strong resistance around the 1.3200 level and higher at 1.3300. This could trigger a short-term pullback. Friday’s rebound also pushed the pair close to overbought levels of the 14-hour RSI in the 60-min chart.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in both markets. On Wednesday, the US retail sales data for August missed the (MoM) expectation of 1% with 0.6%. Retail sales control group figures for the month also missed 0.5% with -0.1%. On the other hand, retail sales ex-autos came short of 0.9% with 0.7%. Earlier in the week, Industrial production for August missed the (MoM) expectation of 1% with 0.4%. 

On Friday, the preliminary Michigan Consumer Sentiment Index for Sep. beat the expectation of 75 with 78.9. And on Thursday, building permits and housing starts for August came short of the (MoM) expectations of 1.52M and 1.478M with 1.47M and 1.416M, respectively. The initial jobless claims for the week ending August 11 came short of expectations while continuing claims for the preceding week beat expectations.

In Canada, BoC’s CPI for August missed expectations on Wednesday while retail sales disappointed on Friday.

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

Technically, the USD/CAD currency pair appears to be trading within a slightly ascending wedge in the 60-min chart. This indicates a slight short-term bullish bias in the market sentiment. The pair has now surged closer to overbought levels of the 14-hour RSI.

The bulls will be targeting short-term profits at around 1.3246 or higher at 1.3300. On the other hand, the bears will target short-term pullback profits at around 1.3147 or lower at 1.3094.

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. This indicates intense long-term bearish pressure in the market sentiment.

The bears will look to extend the current declines towards 1.3000 or lower at 1.2794. On the other hand, the bulls will target reversal profits at around 1.3356 or higher at 1.3608.