The USD/CAD currency pair on Friday afternoon pulled back to erase the day’s session gains after the latest round of Canadian retail sales data. The currency pair is now trading between 23.60% and 38.20% fib levels off its mid-week gains in the 60-min chart.
The currency pair is now back within the normal trading zone of the 14-hour RSI after advancing to overbought conditions earlier in the week. It still remains several levels above the 100-hour moving average.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in both the US and the Canadian markets. On Friday, the Canadian retail sales ex-autos for June beat the (MoM) expectation of 4.6% with a change of 4.7%. On the other hand, general retail sales for the period missed the expected (MoM) change of 4.4% with a change of 4.2%. On Thursday, Canada’s ADP Employment Change for July came in at 221.3k up from the previous period’s equivalent of -106.2k.
In the US, the initial jobless claims for last week came in lower than expected at 348k compared to 363k. However, continuing claims missed the ex[pectation of 2.8 million with a higher claim count of 2.82 million. The Philadelphia Fed Manufacturing Survey for August also missed the expected reading of 23 with 19.4.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to have recently pulled back to trade between 23.60% and 38.20% fib levels. The currency pair rallied significantly on Wednesday and Thursday before erasing a significant chunk of the gains. It is now back to the normal trading zone after venturing to overbought conditions in mid-week.
The bulls will be targeting immediate rebound profits at the 23.60% fib level at 1.2852 or higher at 1.2887. On the other hand, the bears will look to extend the current declines towards 38.20% and 50% fib levels at 1.2806 or lower at 1.2769.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair seems to be trading within an ascending channel formation. The pair recently bounced off 1.2500 to advance towards 1.2950. However, it has since pulled back after reaching overbought conditions in the 14-day RSI.
Therefore, the bears will be looking to stretch the current pullback towards 1.2740 or lower to 1.2618. On the other hand, the bulls will target long-term profits at around 1.2945 or higher at 1.3067.