The USD/CAD currency pair on Thursday plunged to a new weekly low of about 1.2637 following the latest round of Canadian retail sales. The currency pair continues to trade within a sharply descending channel formation in the 60-min chart.
The currency pair has now dropped several levels below the 100-hour moving average. However, it attempted a later rebound late on Thursday pushing it off oversold conditions. Therefore, the rebound could continue on Friday.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in both the US and the Canadian markets. On Thursday, the US initial jobless claims for the week ending September 17 missed the expected claim count of 320k with 351k.
In addition, the continuing claims for the period ending the previous week also came short of the expected tally of 2.65 million with a higher claim count of 2.845 million. On the other hand, the preliminary Markit Manufacturing PMI, the Services PMI, and the PMI Composite for September missed expectations.
In Canada, retail sales for July beat the expected (MoM) change of -1.2% with a change of -0.6%. Retail sales ex-autos for the period also came in stronger than expected with the (MoM) change of -1% compared to an expectation of -1.5%.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair seems to be trading within a sharply descending channel formation in the 60-min chart. This indicates a strong short-term bearish bias in the market sentiment.
Therefore, the bears will look to extend the current declines towards 1.2637 or lower to 1.2617. On the other hand, the bulls will target potential rebound profits at 1.2672 or higher at 1.2695.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to be trading within an ascending channel formation. This indicates a significant long-term bullish bias in the market sentiment. However, the pair recently pulled back to avoid advancing to overbought conditions.
Therefore, the bulls will be looking to retain the long-term control of the pair by targeting profits at about 1.2747 or higher at 1.2853. On the other hand, the bears will look to pounce for long-term profits at 1.2554 or lower at 1.2436.