On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.4264 to trade at about 1.4226. The currency pair trades within an ascending channel formation on the 60-minute chart.
The pair continues to trade a few levels above the 100-hour moving average line, despite the pullback. As a result, 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 Thursday. The US ISM Manufacturing PMI for September missed expectations of 55, with a reading of 54.5. The ISM Manufacturing Prices Paid for the period came in better than expected, at 77.9 versus a forecast of 72.3. On the other hand, the initial jobless claims for last week fell slightly to 197k, down from the preceding week’s equivalent of 198k, beating the forecast claim count of 200k.
On Wednesday, US personal income for August missed the expected (MoM) change of 0.4%, with a change of 0.2%, while personal spending outshone the estimate of 0.8%, with a change of 0.9%. The Chicago Purchasing Managers’ Index for September also came in stronger than expected, at 58.8 versus a forecast of 52.1, up from the previous month’s equivalent of 47.1.
Elsewhere, the annualized US gross domestic product for Q2 exceeded expectations of 1.5%, with a change of 2.2%. The personal consumption expenditures price index for August fell short of the forecast (MoM) and (YoY) changes of 0.4% and 3.7%, respectively, with changes of 0.3% and 3.4%. On the other hand, the ADP employment change for September beat expectations of 70k, with a change of 90k, up from 36k in August.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair trades within an ascending 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 pullback towards 1.4184 or lower, to 1.4137. On the other hand, the bulls will look to pounce on profits at about 1.4264 or higher, at 1.4308.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair has recently formed a double-bottom pattern, triggering a major rebound. The 14-day RSI also supports a bullish bias after rallying into overbought conditions.
Therefore, the bulls will look to ride the current run of gains toward 1.4475 or higher, up to 1.4718. On the other hand, the bears will look to pounce on pullbacks at about 1.3963 or lower, down to 1.3713.