The USD/CAD currency pair extended the current weekly gains on Friday to hit new weekly highs after positive economic data from the US gave the US Dollar the edge against its counterpart, the ‘loonie’. The pair advanced to trade at 1.3417 in the US trading hours from session lows of about 1.3340.
The currency pair has been on an upward movement since the start of the week in an attempt to recoup last week’s losses. Now, the greenback appears well positioned to end the week closer to last week’s highs en route to the current monthly highs.
USD/CAD Fundamentals Overview
The USD/CAD currency pair’s current gains are attributed to the strong US economic data released today. Retail sales beat expectations with 0.5% MoM growth compared to a forecast of 0.4% while Business Inventories were in line with expectations at 0.5% versus 0.0% previous.
However, the Consumer Sentiment Index missed slightly with 97.9 points versus 98 points expected while Capacity utilization was better by a percentage point with 78.1% versus an estimate of 78%.
Later in the day, the Baker Hughes US Oil Rig Count was 788 compared to 789 from the previous week. Traders will be looking forward to the CFTC USD NC Net positions and the CFTC Oil NC Net positions for direction going into next week.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAd currency pair appears to be experiencing downward pressure as a descending channel looks to form. However, for the mean-time, the pair looks to ride the current rebound up towards 1.3460, which will be a perfect target for the bulls.
On the other hand, the bears will hope that the current rebound is cut short as it is currently level with the previous high. They will target profits at around 1.3398 or lower at 1.3380 levels.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to enjoy strong bullish bias, well supported by both the 100-day and the 200-day moving average lines.
The Relative Strength Index indicator also shows that there is a lot of room to run up top, as there is down below, which suggests a continuation of the current pattern. The bulls will target intermediate profits at 1.3500 while the bears will be looking down below at 1.3350.
In summary, the USD/CAD currency pair appears to enjoy a long-term bullish bias but the bears have taken control in the short-term.