On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.3844 to trade at about 1.3787. The currency pair trades within a descending channel formation in the 60-minute chart. 

Thursday’s pullback pushed the currency pair further below the 100-hour moving average line. As a result, the 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 consumer price index for December outperformed the (MoM) expectation of -0.3%, with a change of -0.2%. The (YoY) equivalent also came in better than expected, with 2.4% versus a forecast of 2.2%. Traders will be looking forward to the Canadian retail sales data for November on Friday.

In the U.S., personal income for November missed the expected change of 0.4%, with a change of 0.3% (MoM). On the other hand, personal spending came in as expected with a change of 0.5%. The core personal consumption expenditures – price index for November matched the (MoM) and (YoY) forecasts of 0.2% and 2.8%, respectively. 

Elsewhere, the annualized U.S. gross domestic product for Q3 outperformed the expected change of 4.3%, with a change of 4.4%. The gross domestic product price index for the quarter was in line with the estimate of 3.7%. 

Personal consumption expenditures prices for Q3 also matched the expected (QoQ) change fo 2.8%, while the core personal consumption expenditures for the period were in line with the estimate of 2.9% (QoQ).

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

Technically, the USD/CAD currency pair trades within a descending 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 extend the latest pullback towards 1.3733 or lower to 1.3680. On the other hand, the bulls will look to pounce on rebounds at about 1.3844 or higher at 1.3897.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair also trades within a descending channel formation. The 14-day RSI has recently pulled back to avoid rallying into overbought conditions. 

Therefore, the bears will look to stretch the latest pullback towards 1.3641 or lower to 1.3493. On the other hand, the bulls will look to pounce on profits at about 1.3927 or higher at 1.4086.