USD/CAD Pulls Back Off Weekly Highs to Trim Gains After the US ISM Data

The USD/CAD currency pair on Friday pulled back from the current weekly highs to trade at about 1.2912 after the latest round of US data. The currency pair seems to be trading within a sharply descending channel formation in the 60-min chart.

However, the pair remains several levels above the 100-hour moving average line, leaving more room for downward movement. Friday’s sharp pullback pushed the currency pair back to the normal trading range after slipping to overbought conditions.

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 ISM Manufacturing PMI for June missed the expectation of 54.9 with 53. The ISM Manufacturing PMI for Prices Paid also came short of 81 with 78.5, while the New Orders Index and the Employment Index missed54.2 and 50.2, respectively with 49.2 and 47.3. On the other hand, the S&P Global Manufacturing PMI beat 52.4 with 52.7.

On Thursday, the US personal spending for May missed the expected change of 0.5% with 0.2%, while personal income was in line with the expectation of 0.5%. Elsewhere, the Chicago purchasing managers index for June missed the expectation of 58 with 56, while the initial jobless claims for the week ending June 24 also came short of 228k with a higher tally of 231k. In Canada, the GDP for April matched the (MoM) expectation of 0.3% with 0.3%.

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

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

Therefore, the bears will be looking to extend the current declines toward 1.2880 or lower to 1.2846. On the other hand, the bulls will target potential rebound profits at about 1.2941, or higher at 1.2972.

USD/CAD Technical Analysis (the Daily Chart)

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

Therefore, the bulls will be targeting potential reversal profits at about 1.3041, or higher at 1.3150. On the other hand, the bears will target extended declines at about 1.2802 or lower at 1.2682.

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