The USD/CAD currency pair on Wednesday plunged for highs of about 1.2675 to trade at about 1.2568 after mixed US inflation data. The currency pair has now dropped off the ascending channel formation to trade below the 100-hour moving average.

Nonetheless, the pair seems to have found support around the 1.2565 level after attempting a rebound to avoid falling deep into the oversold conditions of the 14-hour RSI.

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 Wednesday, the US producer price index for March beat the expected (MoM) change of 1.1% with a change of 1.4%. On the other hand, the (YoY) equivalent beat 10.6% with 11.2%. The producer price index ex-food and energy also outperformed the (MoM) and (YoY) expectations of 0.5% and 8.4%, respectively with 1% and 9.2%.

Earlier in the week, the US consumer price index ex-food and energy for March missed the expected (MoM) change of 0.5% with 0.3%, while the (Yoy) equivalent came short of 6.6% with 6.5%. On the other hand, the general CPI for the period outperformed the (YoY) expectation of 8.4% with 8.5%, while the (MoM) equivalent was in line with ex[pectations at 1.2%.

In Canada, the Bank of Canada raised the base interest rate from 0.5% to 1% in line with expectations on Wednesday.

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

Technically, the USD/CAD currency pair seems to have recently pulled back to complete a downward breakout from an ascending channel formation. This indicates an abrupt change in the market sentiment from bullish to bearish.

Therefore, with the pair moving closer to oversold conditions, the bulls will target rebounds at about 1.2587, or higher at 1.2613. On the other hand, the bears will target extended declines at 1.2549, or lower at 1.2529.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair seems to be trading within an ascending channel formation. This indicates a significant long-term bullish bias in the market sentiment.

Therefore, the bulls will be looking to ride the current bull-run by targeting profits at about 1.2642, or higher at 1.2739. On the other hand, the bears will look to pounce for pullbacks at about 1.2501, or lower at 1.2446.