On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.3887 to trade at about 1.3861. The currency pair trades within an ascending channel formation in the 60-minute chart.

The pair continues to trade several levels above the 100-hour moving average line, despite the pullback. Thursday’s pullback helped the currency pair recover from the overbought 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 December exceeded the expectation of 49.5, with a reading of 51.9, up from 48.4 in November. Traders will be looking forward to the net employment change data and the unemployment rate change for December on Friday.

In the U.S., the initial jobless claims for last week increased to 208k, up from 200k in the preceding week, slightly lower than the forecasted claim count of 210k. On Wednesday, the ISM Services PMI for December came in better than expected, with 54.4 versus 52.3, up from 52.6 in November. 

On the other hand, the ADP employment change for December missed the expectation of 47k, with 41k, up from the preceding month’s equivalent of -29k. The JOLTS Job Openings for November also came in lower than expected, with 7.146 million versus a forecast of 7.6 million, down from 7.449 million in October, while the factory orders for October missed the forecasted (MoM) change of -1.2%, with a change of -1.3%.

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

Technically, the USD/CAD currency pair trades within an ascending channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to recover from overbought conditions.

Therefore, the bears will look to extend the latest pullback towards 1.3834 or lower to 1.3809. On the other hand, the bulls will look to pounce on profits at about 1.3887 or higher at 1.3912.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair has recently completed an upward breakout from a descending channel formation. The 14-day RSI also supports a bullish bias after bouncing back to avoid falling into oversold conditions.

Therefore, the bulls will look to stretch the latest rebound towards 1.3964 or higher to 1.4079. On the other hand, the bears will look to pounce on profits at about 1.3753 or lower at 1.3643.