The USD/CAD currency pair on Friday plunged to trade at around 1.2500 following the latest round of the US retail sales data. The currency pair appears to be trading within a gently descending wedge formation in the 60-min chart.
The currency pair has now dropped to trade below the 100-hour and the 200-hour SMA lines. It continues to trade very close to the oversold levels of the 14-hour RSI. This could trigger a short-term rebound.
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. On Thursday, the US retail sales control group for March beat the expectations of 6.3% with a change of 6.9%. General retail sales grew by 9.8% (MoM) versus the expected growth of 5.9%. The initial jobless claims for the week ending April 9 beat the expected claim count of 700k with a tally of 576k. The continuing claims for the preceding week missed the expected count of 3.7 million with 3.731 million. Retail sales ex-autos beat the expected (MoM) change of 5% with a change of 8.4%.
On Friday, Building Permits and Housing Starts for March outshone expectations. The preliminary Michigan sentiment index for March missed the expectation of 89.6 with 86.5. In Canada, wholesale sales and Manufacturing sales for February missed the (MoM) expectations of -0.4% and -1% with -0.7% and -1.6%, respectively.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to be trading within a gently descending wedge formation in the 60-min chart. This indicates a slight short-term bearish bias in the market sentiment.
The bulls will be targeting short-term rebound profits at around 1.2530 or higher at 1.2560. On the other hand, the bears will look to pounce for pullbacks at around 1.2475 or lower at 1.2447.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.
The bears will be looking to extend the current declines towards 1.2400 or lower to 1.2277. On the other hand, the bulls will target long-term profits at around 1.2625 or higher at 1.2730.