On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.3885 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 a few levels below the 100-hour moving average line. Thursday’s pullback prevented the currency pair from advancing into 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. On Thursday, the U.S. initial jobless claims for the week ending May 16 fell to 227k, down from 229k in the preceding week, beating the forecasted claim count of 230k.
The preliminary S&P Global Manufacturing PMI for May outperformed the expectation of 50.1 with a reading of 52.3, up from the previous month’s equivalent of 50.2. On the other hand, the preliminary S&P Global Services PMI for the period outshone the estimate of 50.8 with a reading of 52.3, up from 50.8, while the [preliminary S&P Global Composite PMI edged higher to 52.1 up from 50.6.
In Canada, the consumer price index for April missed the (MoM) expectation of 0.5% with a change of -0.1%. The (YoY) equivalent outshone the forecast of 1.6% with a rate of 1.7%. On the other hand, the Bank of Canada’s consumer price index improved to 0.5%, up from 0.1% (MoM), beating the forecast of 0.2%. The (YoY) equivalent also rose to 2.5%, up from 2.2% in March. Traders will look forward to Canada’s retail sales data for March on Friday.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair trades within an ascending channel formation in the 60-min chart. However, the 14-hour RSI still has room left to run before reaching overbought conditions.
Therefore, the bulls will look to extend the current rebounds toward 1.3885 or higher to 1.3908. On the other hand, the bears will look to pounce on pullbacks at about 1.3837 or lower at 1.3813.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair trades within an ascending channel formation. However, the 14-day RSI has recently pulled back to avoid rallying into overbought conditions.
Therefore, the bears will target extended pullbacks at about 1.3771 or lower at 1.3681. On the other hand, the bulls will look to pounce on rebounds at about 1.3958 or higher at 1.4047.