On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.4003 to trade at about 1.3898. The currency pair trades within a descending channel formation in the 60-minute chart. 

As a result, the pair continues to trade a few levels below the 100-hour moving average line. However, the currency pair still has room left to run before reaching 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 the Canadian market. On Thursday, Canada’s retail sales for August matched the forecasted (MoM) change of 1%. On the other hand, the retail sales ex-autos for the period fell short of the forecasted change of 1.2% with a change of 0.7%.

Earlier in the week, Canada’s consumer price index for September beat the expected (MoM) change of -0.1% with a change of 0.1%. The (YoY) equivalent also outshone the forecast of 2.3% with a change of 2.4%. The BoC’s core CPI for the month improved to 2.8%, up from 2.6% (YoY), while the (MoM) equivalent edged higher to 0.2% from 0%. 

In the U.S., Congress remained in a stalemate on Thursday, failing to agree on compensation for Federal essential workers. The budget impasse on the bill further extends the ongoing government shutdown, which has now become the second-longest in U.S. history. In the latest U.S. economic data, existing home sales missed the expectation of 4.1 million with a tally of 4.06 million. 

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. However, the 14-hour RSI still has room left to run before reaching oversold conditions.

Therefore, the bears will look to stretch the current decline towards 1.3975 or lower to 1.3960. On the other hand, the bulls will look to pounce on profits at about 1.4003 or higher at 1.4017.

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 advancing into overbought conditions.

Therefore, the bears will look to extend the current pullback towards 1.3888 or lower to 1.3789. On the other hand, the bulls will look to ride the current rally towards 1.4078 or higher to 1.4173.