The USD/CAD currency pair on Tuesday rallied to hit a daily high of about 1.3320 before pulling back late on to settle at around 1.3295. The currency pair continues to trade in a consolidative wedge with strong flat resistance and ascending support which indicates a slight bullish bias in the market sentiment.
The pair is now pegged just above the 100-hour and the 200-hour SMA lines in the 60-min chart, which is providing additional support going into mid-week.
USD/CAd Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively quiet period in both the US and the Canadian markets. However, looking forward, the week will get busier with the US non-farm payrolls coming later this week.
On Monday, the Canadian Markit Manufacturing PMI for Novem ber missed the expectation of 52.6 with 51.4. On the other hand, the US Markit Manufacturing PMI beat the expectation of 52.2 with 52.6 but the ISM Manufacturing data for the same period 49.2 with 48.1.
ISM Prices paid for the month also came short of 47 expected with 46.7 while Construction Spending for October was way off the mark with -0.8% (MoM) change versus the expectation of 0.4%.
And on Tuesday, the US ISM-NY Business Conditions Index impressed with 50.4 versus the expectation of 44.7. All eyes will be on tomorrow’s BoC statement and interest rate decision, which is expected to remain at 1.75%.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to have recently pulled off the borderline to the overbought levels following today’s late pullback. The currency pair continues to experience significant bullish pressure, which appears to be waning after the flattening of the top channel in recent trading sessions.
Therefore, the bears will be targeting short-term profits at around 1.3282 or lower at 1.3269 in the hope that the pullback continues in the coming days. On the other hand, the bulls will be targeting an immediate rebound back towards the resistance level at 1.3308 or higher at 1.3320.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to be trading in a descending channel which indicates a long-term bearish pressure in the market sentiment. The pair has recently surged to hit the trendline resistance at around 1.3300, which triggered the current pullback.
Therefore, the bears will be targeting long-term profits at around 1.3197, 1.3136 or lower at 1.3043. On the other hand, the bulls will hope that the pair can continue with the rebound and surge towards 1.3355 or higher at 1.3432.