On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.3905 to trade at about 1.3828. The currency pair trades within a descending channel formation in the 60-minute chart.
The pair has now plummeted to trade a few levels below the 100-hour moving average line. As a result the currency pair is closer to 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. On Thursday, the U.S. building permits for March came in better than expected with 1.482 million versus a forecast of 1.45 million, up from the previous month’s equivalent of 1.459 million.
On the other hand, the housing starts for the month missed the forecast of 1.42 million with 1.324 million, down from 1.494 million in February. The Philadelphia Fed Manufacturing Survey for April fell short of the forecasted reading of 2 with -26.4, down from 12.5 in March, while the initial jobless claims for last week came in lower than expected with 215k versus a forecast of 225k, down from the preceding week’s claim count of 224k.
In Canada, the BoC chose to keep the base interest rate unchanged at 2.75% in line with expectations. Earlier inthe week, the consumer price index for March missed the expected (MoM) rate of 0.7% with a rate of 0.3%. The (YoY) equivalent also fell short of the forecast of 2.6% with 2.3%, down from 2.6% in February. The BoC’s core CPI for the month fell to 0.1% (MoM) and 2.2% (YoY), down from 0.7% and 2.7%, respectively.
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 moves closer to oversold conditions.
Therefore, the bears will look to stretch the current downward movement towards 1.3787 or lower to 1.3747. On the other hand, the bulls will look to pounce on rebounds at about 1.3866 or higher at 1.3905.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair has completed a downward breakout from a descending channel formation. The 14-day RSI also supports a bearish bias as it is on the verge of entering oversold conditions.
Therefore, the bears will look to stretch the current declines toward 1.3708 or lower to 1.3586. On the other hand, the bulls will look to pounce on profits at about 1.3957 or higher at 1.4075.