The USD/CAD currency pair has pulled back again after a short-term rebound within what appears to be a consolidative phase. The pair rallied to test the current monthly highs of about 1.3500 at the start of the week.
But then it dropped again on Wednesday and those losses were extended on Thursday before fashioning a late rebound in the afternoon (GMT).
And as the North American markets opened, the greenback appeared to have the upper hand with an early surge against the loonie.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading ahead of what will be a busy day in both economies. In the US, the Federal Reserve’s Brainard speech is expected at around 16:15 GMT. On the other hand, the Bank of Canada’s Poloz speech is expected an hour earlier at 15:15 GMT.
Earlier in the day, the US Initial Jobless claims were better than expected at 212,000 compared to a forecast of 220,000. The Continuing Jobless also did not disappoint coming in at 1.660 million versus a forecast of 1.6680 million.
The loonie is also expected to suffer slightly due to its ties to petroleum prices after the EIA Natural Gas Storage Change edged upwards to 106 Billion versus 85 billion in the previous week. It was also above the consensus estimate of 104 billion.
USD/CAD Technical Analysis (the 240-min Chart)
From a technical perspective, the pair appears to be currently pegged within a tight sideways trading range in the 240-min chart. Since the start of the month, USD/CAD has oscillated between 1.3380-1.3500 range.
In the short-term, the two support and resistance levels will serve as great targets for the bears and the bulls respectively. However, the bulls retain long-term control as the current movement takes place inside a massive ascending channel, which indicates a bullish bias.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD pair appears to be on a recovery journey following a major plunge at the start of the year. And as demonstrated using the Fib retracements, the pair is now nearing 76% recovery but the recent pullback put it back at around 61.80% Fib level.
This creates great opportunities for the bulls and the bears to profit by targeting the Fib levels at 76.40% (Bulls) and 50% level (bears).
In summary, the USD/CAD currency pair appears to be on an upward trending movement with several pullbacks and rebounds to pounce on along the way.