On Wednesday, the USD/CAD currency pair pulled back from the session highs of about 1.4300 to trade at about 1.4225. The currency pair trades within a sideways channel formation on the 60-minute chart.
The pair has now plummeted to trade slightly 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 US market. On Wednesday, the US consumer price index for September edged higher to 0.6% (MoM), up from 0.4% in August, in line with expectations. The (YoY) equivalent rose significantly to 3.7%, up from the previous month’s equivalent of 3.4%, beating the forecast change of 3.6%.
On the other hand, the consumer price index ex-food and energy outperformed the (MoM) forecast of 0.2%, with a change of 0.3%, unchanged from August. The (YoY) equivalent also rose to 2.6%, up from 2.4%, beating the forecast change of 2.5%. Earlier in the week, the average 4-week US ADP change fell to 24.75k, down from the previous update of 25.25k. Existing home sales grew by 1.5% (MoM) in September compared to a decline of 3.2% in the previous month.
Looking forward, traders will be waiting for the US producer price index data and the retail sales data for September, alongside the October NY Empire State Manufacturing Index and the Philadelphia Fed Manufacturing Survey on Thursday. The initial jobless claims data is expected to increase to 200k, up from 197k in the previous update.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair trades within a sideways channel formation on the 60-minute chart. However, the 14-hour RSI has recently pulled back to recover from overbought conditions.
Therefore, the bears will look to stretch the current pullbacks toward 1.4189 or lower, down to 1.4152. On the other hand, the bulls will look to pounce on rebounds at about 1.4262 or higher, up to 1.4300.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair trades within a slightly ascending channel formation. However, the 14-day RSI has recently pulled back to recover from overbought conditions.
Therefore, the bears will look to extend the current pullback towards 1.4000 or lower, down to 1.3788. On the other hand, the bulls will look to pounce on profits at about 1.4409 or higher, up to 1.4611.