The USD/CAD currency pair on Friday pulled back to trade at around 1.2689 following the latest update on the US consumer sentiment index. The currency pair appears to be trading within a descending channel formation in the 60-min chart.
The currency pair has now dropped to trade below the 100-hour SMA while the 200-hour SMA is a few levels higher. Friday’s pullback pushed the currency pair back to the normal trading zone after crossing to overbought levels during the week. It now looks closer to the oversold levels.
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 preliminary Michigan consumer sentiment index for January missed the expected reading of 80.8 with a reading of 76.2. On Thursday, the initial jobless claims for the week ending February 5, came short of 757k with a claim count of 779k.
The continuing claims for the preceding week also disappointed with 4.545 million versus an expected cumulative claim count of 4.49 million. Earlier in the week, the US consumer price index ex-food and energy for January missed the expected change of 0.2% with a change of 0.0% (MoM). The (YoY) change missed 1.5% with 1.4%. General CPI for the period also missed 1.5% with 1.4% (YoY) while the (MoM) estimate was in line.
In Canada, wholesale sales for December beat the expected (MoM) change of -1.6% with a change of -1.3%.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to be trading within a descending channel formation in the 60-min chart. It has now moved closer to oversold levels after Friday’s pullback. This shows a strong bearish bias in the market sentiment.
The bulls will be targeting short-term profits at around 1.2719 or higher at 1.2750. On the other hand, the bears will look to extend the current pullback towards 1.2662 or lower to 1.2629.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.
The bulls will target potential rebound profits at around 1.2870 or higher at 1.3000. On the other hand, the bears will look to ride the current bearish run by targeting profits at around 1.2540 or lower at 1.2400.