The USD/CAD currency pair on Thursday pulled back off the session highs of about 1.3615 to trade at about 1.3538. The currency pair appears to have completed a downward breakout from a sideways channel formation.
The pair has now fallen to trade a few levels below the 100-hour moving average line in the 60-minute chart. As a result, the currency pair has now plummeted to trade closer to the oversold levels 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 Thursday, the US initial jobless claims for the week ending March 22 outperformed the expected claim count of 215k with a tally of 210k, while the continuing claims for the preceding week missed 1.807 million with 1.819 million.
On the other hand, the annualised US gross domestic product for Q4 grew by 3.4% compared to a change of 3.2% in the preceding quarter, beating the forecasted change of 3.2%. The US gross domestic product price index was in line with the estimate of 1.7%. The personal consumption expenditures prices for the quarter also matched the expected (QoQ) change of 1.8%, while the core personal consumption expenditures for the period missed 2.1% with a (QoQ) change of 2%.
The Chicago Purchasing Managers’ Index for March missed the estimate of 46 with 41.4, while the Michigan consumer sentiment index for the month beat 76.5 with a reading of 79.4. Elsewhere, pending home sales for February posted a (MoM) change of 1.6% beating the estimate of 1.5%. In Canada, the gross domestic product for January exceeded the estimated (MoM) change of 0.4% with a change of 0.6%.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to have recently completed a downward breakout from a sideways channel formation. The 14-hour RSI also seems to support a bearish bias as it moves closer to the oversold levels.
Therefore, the bears will be looking to stretch the current declines toward 1.3502 or lower to 1.3468. On the other hand, the bulls will look to pounce on rebounds at about 1.3580 or higher at 1.3615.
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. However, the 14-day RSI has recently pulled back to avoid rallying into overbought conditions.
Therefore, the bears will be targeting extended pullbacks at about 1.3400 or lower at 1.3240. On the other hand, the bulls will look to pounce on rebounds at about 1.3694 or higher at 1.3837.