On Wednesday, the USD/CAD currency pair pulled back from the session highs of about 1.3970 to trade at about 1.3947. The currency pair trades within a sideways channel formation in the 60-minute chart.

The pair has now fallen to trade slightly below the 100-hour moving average line. However, Wednesday’s pullback prevented the currency pair from ascending 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. In Canada, the seasonally-adjusted Ivey Purchasing Managers’ Index for September outperformed the expectation of 51.2 with a reading of 59.8, up from 50.1 in the previous period. On the other hand, the International Merchandise Trade for August fell to $-6.32 billion, down from $-3.82 billion in July, missing the forecast of $-5.55 billion. 

In the U.S., MBA mortgage applications posted an improved change of -4.7% versus -12.7% in the previous update. On Tuesday, RealClearMarkets/TIPP Economic Optimism for October missed the (MoM) forecast of 49.3, with a reading of 48.3, down from 48.7 in September. Consumer Credit Change for August also fell short of $13.5 billion, with $0.36 billion, down from $16.01 billion in July.

Looking forward, traders will be waiting for the U.S. claims data on Thursday, ahead of the Michigan Consumer Sentiment and Expectations Indexes for October, and the UoM 1-year and 5-year consumer inflation expectations data on Friday. 

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

Technically, the USD/CAD currency pair trades within a sideways channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to avoid rallying into overbought conditions.

Therefore, the bears will look to stretch the current pullback towards 1.3914 or lower to 1.3884. On the other hand, the bulls will look to pounce on rebounds at about 1.3970 or higher at 1.3999.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair trades within an ascending channel formation. The 14-day RSI also supports a long-term bullish bias as it edges closer to overbought conditions.

Therefore, the bulls will look to stretch the current gains toward 1.4072 or higher to 1.4202. On the other hand, the bears will look to pounce on pullbacks at about 1.3794 or lower at 1.3664.