On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.3708 to trade at about 1.3652. The currency pair also completed a downward breakout from an ascending channel formation.

The pair has since fallen to trade slightly below the 100-hour moving average line. As a result, the currency pair is on the verge of entering the oversold 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 seasonally adjusted Ivey Purchasing Managers’ Index for June came in better than expected, with 53.3 versus a forecast of 49.1, up from the previous month’s equivalent of 48.9. Traders will be looking forward to Canada’s employment change and the unemployment rate for June on Friday.

In the U.S., the initial jobless claims for the week ending July 4 came in lower than expected, with 227k versus a forecast of 235k, down from the preceding week’s equivalent claim count of 233k. The continuing claims for the week ending June 27 also beat the expectation of 1.98 million with a claim count of 1.965 million, up from the preceding week’s equivalent of 1.955 million. 

Earlier in the week, US wholesale inventories for May matched the forecast of -0.3%, unchanged from the previous period. On the other hand, Mortgage applications for the month improved with a change of 9.4% versus a change of 2.7% in the previous update. 

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

Technically, the USD/CAD currency pair has completed a downward breakout from an ascending channel formation in the 60-minute chart. The 14-hour RSI also supports a bearish bias as it edges closer to oversold conditions.

Therefore, the bears will look to stretch the current pullback towards 1.3620 or lower to 1.3591. On the other hand, the bulls will look to pounce on profits at about 1.3682 or higher at 1.3708.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair trades within a descending channel formation. However, the 14-day RSI has recently bounced back to avoid falling into oversold conditions.

Therefore, the bulls will look to extend the current rebound towards 1.3802 or higher to 1.3937. On the other hand, the bears will look to pounce on profits at about 1.3503 or lower at 1.3367.