USD/CAD Pulls Back Off 8-Week Highs Ahead of Canadian GDP

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The USD/CAD currency pair on Tuesday rallied to retest the current 8-week highs of about 1.3420 before pulling back to trade at 1.3385 late on. The pair continues to trade within an ascending channel after bottoming at around 1.3000 at the start of this month. 

The currency pair remains pinned just above the 100-hour SMA line in the 60-min chart. The 200-hour SMA is a few levels below. Tuesday’s late pullback prevented it from crossing to overbought levels of the 14-hour RSI.

USD/CAD Fundamentals Overview

From a fundamental overview, the USD/CAD currency pair is trading ahead of a relatively busy period in the US market. From the perspective of the Canadian Dollar, traders will be looking forward to Wednesday’s Gross Domestic Product data for July. Raw Materials Price Index and Industrial Production Price data is also coming out tomorrow while the Markit Manufacturing PMI for Sep. will be out on Thursday. 

In the US, preliminary wholesale inventories for August missed the expectation of -0.2% with 0.5%. On the other hand, the S&P/Case-Shiller Home Price Indices for July beat the (YoY) expectation of 3.8% with 3.9%. Going into Wednesday, traders will be looking forward to the US presidential debate and the Q2 GDP data. Personal Consumption Expenditures (Q2) and ADP Employment Change for Sep. will also be out. Late in the week, the US ISM manufacturing PMIs and Non-farm payrolls for Sep. will be announced.

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

Technically, the USD/CAD currency pair appears to be trading within an ascending channel in the 60-min chart. This indicates a short-term bullish bias in the market sentiment. The latest pullback prevented it from crossing to overbought levels of the 14-hour RSI on Tuesday.

The bulls will be looking to extend the current monthly gains by targeting profits at around 1.3420 or higher at 1.3465. On the other hand, the bears will target short-term pullback profits at around 1.3347 or lower at 1.3300.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair appears to have recently made a bullish breakout from a sharply descending channel. This indicates a potential trend reversal in the market.

The bulls will look to build on this reversal by targeting profits at around 1.3608 or higher at 1.3811. On the other hand, the bears will look to pounce on long-term profits at around 1.3200 or lower at 1.2962.

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