On Wednesday, the USD/CAD currency pair pulled back from the session highs of about 1.4077 to trade at about 1.4049. The currency pair trades within a descending channel formation on the 60-minute chart.

The pair continues to trade several levels below the 100-hour moving average line after the pullback. However, it still has some 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 US market. In Canada, the BoC chose to keep the base interest rate unchanged at 2.25% as expected.

In the US, the producer price index for June missed the (MoM) expectation of 0%, with -0.3%, down from the previous month’s equivalent of 0.6%. The (YoY) equivalent also edged lower to 5.5%, down from 6%, missing the forecasted rate of 6.2%.

On the other hand, the producer price index ex-food and energy for June missed the forecasted (MoM) and (YoY) rates of 0.4% and 5.2%, respectively, with 0.2% and 4.7%, up from the preceding month’s equivalent of 0.1% and 4.6%. Elsewhere, the NY Empire State Manufacturing Index for July outperformed the expectation of 8.8, with a reading of 15.6, up from 5.7 in June. 

Earlier in the week, the US consumer price index for June missed the expected rate of -0.1%, with a rate of -0.4% (MoM), down from 0.5% in May. The (YoY) equivalent also missed the forecast of 3.8%, with 3.5%, down from 4.2%. On the other hand, the consumer price index ex-food and energy for the month missed the forecasted (MoM) and (YoY) rates of 0.2% and 2.8%, respectively, with 0% and 2.6%, down from the previous month’s equivalent of 0.2% and 2.9%.

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

Technically, the USD/CAD currency pair trades within a descending channel formation on the 60-minute chart. However, the 14-hour RSI has recently bounced back to avoid falling into oversold conditions.

Therefore, the bulls will look to stretch the latest rebound towards 1.4077 or higher to 1.4112. On the other hand, the bears will look to pounce on profits at about 1.4019 or lower at 1.3981. 

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair has recently completed a downward breakout from an ascending channel formation. The 14-day RSI has also pulled back to recover from overbought conditions.

Therefore, the bears will look to ride the current pullback towards 1.3881 or lower to 1.3693. On the other hand, the bulls will look to pounce on rebounds at about 1.4244 or higher at 1.4420.