On Thursday, the USD/CAD currency pair pulled back from the current 3-week highs of about 1.3775 to trade at about 1.3749. The currency pair trades within an ascending channel formation in the 60-minute chart.

The pair continues to trade a few levels above the 100-hour moving average line, despite the pullback. Thursday’s pullback prevented the pair from ascending into the overbought levels of the 14-hour RSI.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair trades during a relatively busy period in both markets. In Canada, the consumer price index for June fell to 0.1% from 0.6% in May, matching the forecast of 0.1%. The (YoY) equivalent improved to 1.9% from 1.7% in the previous period, also in line with estimates. 

In the U.S., the retail sales for June outperformed the expected change of 0.1% with a change of 0.6%, and the retail sales ex-autos also beat 0.3% with a change of 0.5%. On the other hand, the Philadelphia Fed Manufacturing Survey for July exceeded expectations of -1 with a reading of 15.9, up from -4 in June. The initial jobless claims for the week ending July 11 also came in lower than expected, with 221k versus a forecast of 235k, down from the previous week’s equivalent of 228k.

Earlier in the week, the U.S. producer price index for June missed the expected (MoM) and (YoY) forecasts of 0.2% and 2.5%, respectively, with 0% and 2.3%. The producer price index ex-food and energy also fell short of 0.2% and 2.7% with 0% and 2.6%, respectively. 

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

Technically, the USD/CAD currency pair trades within an ascending channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to avoid rallying into overbought conditions.

Therefore, the bears will look to extend the current pullback towards 1.3715 or lower to 1.3685. On the other hand, the bulls will look to pounce on upward movements at about 1.3775 or higher at 1.3803.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair is about to complete a double-bottom reversal pattern formation. The 14-day RSI also supports a bullish bias as it moves towards overbought conditions.

Therefore, the bulls will look to ride the current rally towards 1.3849 or higher to 1.3939. On the other hand, the bears will look to pounce on pullbacks at about 1.3648 or lower at 1.3557.