The USD/CAD currency pair on Thursday pulled off the new yearly highs of about 1.3170 to trade at 1.3136 despite a disappointing Canadian data on the previous day. The currency pair rallied on Wednesday to set the new yearly highs after the latest round of Canadian data missed estimates on several counts.
Today’s pullback pushed the pair off overbought levels. It has now retracted by nearly 24% off yesterday’s highs. This could be an ideal point to target rebound profits.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a busy period in both the US and the Canadian markets. On Tuesday, Canadian Manufacturing data for November missed the expected (MoM) change of -0.3% with -0.6%. And on Wednesday, the BoC’s CPI for December came short of the expected (YoY) change of 1.9% with 1.7%. The (MoM0 equivalent missed the expectation of -0.2% with -0.4%.
Wholesale Sales for November edged down 1.2%. Analysts were expecting a change of 0.0%. The Bank of Canada chose to keep the base interest rate decision unchanged at 1.75%.
In the US, Existing Home Sales for December beat the expected (MoM) figure of 5.43M with 5.54M. On the other hand, the initial jobless claims for the week ending January 17 beat the expectation of 215k claims with 211k. However, the Chicago Fed Activity Index for December missed the expectation of -0.3 with -0.35.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to be trading under strong short-term bullish pressure following yesterday’s triangle breakout. The currency pair has since pulled back to take a breather, but the bulls retain control.
Therefore, the bulls will be targeting short-term profits ta around 1.3151 or higher at 1.3170 going into Friday. On the other hand, the bears will look to pounce for profits at around 38.20%, 50%, and 61.80% Fib levels at 1.3115, 1.3100 and 1.3085, respectively.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAd currency pair still appears to be experiencing substantial long-term bearish pressure. The pair continues to trade in a descending channel below the 100-day and the 200-day SMA lines, which indicates a bearish bias in the market sentiment.
Therefore, the bears will be targeting long-term p[rofits at around 1.3030, 1.2947 and 1.2868. On the other hand, the bulls will look to pounce for profits at around 1.3247, 1.3356 and 1.3450.