The USD/CAD currency pair on Friday pulled back off the trendline support at 1.2855 to trade at around 1.2810. The currency pair continues to trade within a descending channel formation in the 60-min chart.

The pair has now dropped to trade below the 100-hour moving average line. However, the currency pair remains pinned centrally in the 14-hour RSI, leaving room for more downward movement.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in the US market. On Friday, the US core personal consumption expenditures price index for June beat the expected (MoM) change of 0.5% with a change of 0.6%. The (YoY) equivalent also outshone the estimate of 4.7% with 4.8%. Elsewhere, personal income for the period came in higher with a change of 0.6% versus a forecast of 0.5% while personal spending outperformed the expectation of 0.9% with a change of 1.1%.

On the other hand, the Michigan Consumer Sentiment Index for June beat the expectation of 51.1 with a reading of 51.5, while the Chicago Purchasing Managers Index missed the forecasted reading of 55 with 52.1. Earlier in the week, the preliminary US annualised GDP for Q2 missed the expectation of 0.5% with -0.9%, while the Federal Reserve raised the base interest rate by 75 basis points to 2.5%, in line with expectations. In Canada, the GDP for May beat the (MoM) expectation of -0.2% with a change of 0%.

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

Technically, the USD/CAD currency pair seems to be trading within a descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment.

Therefore, the bears will be looking to extend the current declines toward 1.2787 or lower to 1.2763. On the other hand, the bulls will look to pounce on potential rebounds at about 1.2833, or higher at 1.2855.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair appears to be trading within a gently ascending channel formation. This indicates a slight long-term bullish bias in the market sentiment.

Therefore, the bulls will be targeting long-term profits at about 1.2971, or higher at 1.3144. On the other hand, the bears will look to pounce on potential pullbacks at about 1.2635, or lower at 1.2481.