On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.3847 to trade at about 1.3776. The currency pair also completed a downward breakout from an ascending channel formation on the 60-minute chart.

The pair has since plummeted, trading several levels below the 100-hour moving average. As a result, the currency pair descended into 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 BoC kept the base interest rate unchanged at 2.25%, as expected. Looking forward, traders will be waiting for the Canadian employment change and unemployment rate for August on Friday afternoon ahead of the Ivey Purchasing Managers’ Index data for the month later in the day.

In the US, the ISM Services PMI for August rose to 55.4, up from the previous month’s equivalent of 54.1, beating the forecast reading of 54.3. The S&P Global Composite PMI for the month was unchanged at 56, as expected. 

On the other hand, initial jobless claims last week increased to 206k, up from 204k, missing the forecast of 205k. Unit labor costs for Q2 also fell short of the forecast change of 1.3%, with a change of 1.2%, while nonfarm productivity for the quarter was in line with the estimate of 1.4%.

Earlier in the week, the US ISM Manufacturing PMI for August missed the expectation of 55.2, with a reading of 54.6, down from 55.6. The ISM Manufacturing Prices Paid for the period also fell short of 72, with a reading of 71.1, unchanged from July. 

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

Technically, the USD/CAD currency pair has recently completed a downward breakout from an ascending channel formation on the 60-minute chart. The 14-hour RSI also supports a bearish bias after falling into oversold conditions.

Therefore, the bears will look to extend the current pullback towards 1.3705 or lower, to 1.3638. On the other hand, the bulls will look to pounce on rebounds at about 1.3847, or higher at 1.3906.

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 1.3945 or higher, to 1.4114. On the other hand, the bears will look to pounce on profits at about 1.3613, or lower at 1.3436.