The USD/CAD currency pair on Friday pulled back off the session highs of about 1.3689 to trade at about 1.3643. The currency pair continues to trade within a descending channel formation in the 60-minute chart.
The pair has now plummeted to trade below the 100-hour moving average line. As a result, the currency pair appears to have descended into 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 both markets. On Friday, the Canadian unemployment rate for April outperformed the expected rate of 6.2% with a rate of 6.1% unchanged from the previous month. The net change in employment for the month also came in stronger than expected with a change of 90.4k compared to a forecast of 18k.
The average hourly wage growth for the month eased to 4.8% down from 5% in the previous period, while the participation rate was up slightly to 65.4% from 65.3%. Earlier in the week, the Ivey Purchasing Managers’ Index for April beat 58.1 with a reading of 63.
In the US, the preliminary Michigan Consumer Sentiment Index for May missed the expectation of 76 with a treading of 67.4, down from 77.2 in the previous period, while the preliminary UoM 5-year inflation expectations for the month edged slightly higher to 3.1% from 3% in the previous update.
On Thursday, the US initial jobless claims for the week ending May 3 missed the expectation of 210k with a significantly higher tally of 231k. The continuing claims for the preceding week beat the estimate of 1.79 million with a tally of 1.785 million.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to be trading within a descending channel formation in the 60-minute chart. The 14-hour RSI has also pulled back to move closer to oversold conditions.
Therefore, the bears will be targeting extended pullbacks at about 1.3597 or lower at 1.3551. On the other hand, the bulls will look to pounce on rebounds at about 1.3694 or higher at 1.3734.
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 beats will be targeting extended pullbacks at about 1.3486 or lower at 1.3356. On the other hand, the bulls will be targeting long-term profits at about 1.3779 or higher at 1.3900.