The USD/CAD currency pair on Wednesday extended the current weekly declines towards YTD lows of about 1.3130. This came after the latest round of US data. The currency pair has plunged this week from a high of about 1.3240 to trade at around 1.3138 amid bearish pressure.
The pair continues to trade within a highly volatile descending channel in the 60-min chart. It has since fallen below the 100-hour and the 200-hour SMA lines. It is also on the verge of crossing to oversold levels of the 14-hour 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 Wednesday, the US durable goods orders for July beat the expected change of 4.3% with a change of 11.2%. On the other hand, nondefense capital goods orders ex-aircraft posted a change of 1.9% in line with expectations. Durable goods orders ex-transportation beat the expected change of 2% with 2.4% while durable goods orders ex-defense edged higher 9.9% compared to the previous change of 9.7%.
Earlier in the week, the Chicago Fed National activity index for July missed the expectation of 2.73 with 1.18 while the housing price index for June beat the (MoM) expectation of 0.1% with 0.9%. The S&P/Case-Shiller Home Price Indices for June missed the (YoY) expectation of 3.8% with 3.5% while New Homes Sales and New Home Sales Change for July outperformed the (MoM) expectations.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to be trading within a highly volatile descending channel in the 60-min chart. This indicates a relatively short-term bearish bias in the market sentiment. The pair is now approaching oversold levels in the 14-hour RSI.
The bulls will be targeting short-term profits at around 1.3183 or higher at 1.3222. On the other hand, the bears will look to retain short-term control by targeting profits at around 1.3098 or lower at 1.3051.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to be trading within a sharply descending wedge. This indicates a strong long-term bearish bias in the market sentiment. The pair continues to trade on the edge of the overbought level in the 14-day RSI.
The bulls will be targeting rebound profits at around 76.40% and 61.80% Fib levels at 1.3357 and 1.3607, respectively. On the other hand, the bears will target long-term profits at around 100% Fib level at 1.2963 or lower at 1.2762.