The USD/CAD currency pair continued to trade in a consolidative pattern formation around the 1.3750 region following this week’s plunge. The currency pair plunged on Tuesday off Monday’s highs of about 1.4010 to bottom at around 1.2730 on Wednesday. It then appeared to find support around 1.2750 on Thursday.

The pair continues to trade within a highly volatile descending wedge. This indicates that the bears hold strong control in the short-term. It remains several levels below the 100-hour and the 200-hour SMA lines. 

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. Canada’s current account balance for Q1 missed the expectation of $-10 billion with $-11.9 billion. Traders will be watching Canada’s gross domestic product data expected on Friday afternoon (12:30 GMT). 

In the US, the initial jobless claims for the week ending May 22, missed the expectation of 2.1 million with 2.123 million. The preliminary annualized GDP for Q1 missed the expectation of -4.8% with -5%. On the other hand, the country’s non-defense capital goods orders ex-aircraft outperformed -10% with -5.8%.

Earlier in the week, the Us housing price index for March missed the (MoM) expectation of 0.3% with 0.1%. On the other hand, US S&P/Case-Schiller home price indices for March outperformed the (YoY) expectation of 3.4% with 3.9%. The preliminary Q1 GDP beat 1.4% with 1.6%  while pending home sales for April disappointed with -21.8% versus an expectation of -15%.

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

Technically, the USD/CAD currency pair appears to be trading within a descending channel. This indicates a short-term bearish bias in the market sentiment. The pair has recently bounced off oversold levels of the 14-hour RSI in the 60-min chart. It could fall back to the region soon.

The bears will be looking to extend losses below the current support level towards 1.3727 or lower at 1.3680. On the other hand, the bulls will target rebound profits at around 1.3802 or higher at 1.3845.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair appears t have recently pulled back off a major bull swing. The pair has now fallen below the 50% Fib level. It trades just off the 100-day SMA.

The bulls will be targeting rebound profits at around 38.20% and 23.60% Fib levels at 1.4010 and 1.4257, respectively. The bears will look to pounce on long-term profits at 61.80% and 76.40% fib levels at 1.3605 and 1.3365, respectively.