The USD/CAD currency pair extended this week’s gains above 1.3198 before pulling back late in the day to settle at around the 1.3180 level. 

The currency pair continues to trade within an ascending wedge that dates back to last week and now looks to be on a path to recoup some of the losses it incurred over the last two months.

The latest rally appears to be turning into a major trend reversal with the bulls seemingly taking control from the bears in the short-term.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading at the back of major economic events in the US. The Redbook Price Index came in on Tuesday while Markit PMI data (preliminary) for July alongside New Home Sales numbers were out on Wednesday. 

Overall, these figures produced a mixed bag of results compared to estimates and data from the previous period. And yesterday, continuing jobless claims and the initial jobless claims for last week were better than expected which gave the greenback more boost. Durable goods numbers also beat expectations. 

Today, the US core GDP (Preliminary) came out better than expected with Q2 growth of 2.5% compared to a forecast of 1.9% growth. On an annualized basis, the growth for the quarter was 2.1%. Elsewhere, preliminary Personal Consumption Expenditure grew by 2.3% beating expectations of 0.6%.

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

From a technical viewpoint, the USD/CAD currency pair appears to be trading within an ascending wedge, which suggests that the bulls have short-term control.

This creates interesting trading opportunities for both the bulls and the bears. The bulls will be targeting profits at around 1.3195 while the bears will look to pounce by targeting profits at around 1.3164 in the short-term.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair appears to be trading within a downward trending channel, which suggests that the bears still retain long-term control. If the current bull-run can break through the trendline resistance, then a trend reversal could occur.

However, for now, the bears will be more optimistic with a high expectation on a potential pullback in the coming days. They will target long-term profits at around 1.3127 while the bulls will remain hopeful of a breakout by targeting profits at around 1.3247.

In summary, the USD/CAD currency pair appears to have a short-term bullish bias, but the bears retain control in the long-term.