USD/CAD Pulls Back Towards 1.3540 After US Non-Farm Payrolls

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The USD/CAD currency pair on Friday failed to bounce back following Thursday’s plunge. This came despite positive US non-farm payrolls. The currency pair has pulled back off Thursday highs of 1.3624 to trade at 1.3546 over the last 24 hours. 

The pair appears to have found strong support from the trendline below, which prevented it from crossing to oversold levels of the 14-hour RSI in the 60-min chart. It continues to trade several pips below the 100-hour and the 200-hour SMA lines.

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 Monday, pending home sales for May beat the (MoM) expectation of 19.7% with 44.3%. The Dallas Fed Manufacturing Business Index for June outperformed -59 with -6.1. On Tuesday, the S&P/Case-Shiller Home Price Indices for April beat the (YoY) expectation of 3.8% with 4% while the Chicago Purchasing Manager’s Index for June missed 45 with 36.6.

On Wednesday, the Markit Manufacturing PMI for June beat 49.6 with 49.8. The ISM Manufacturing Prices Paid and New orders index outperformed expectations. However, the ISM Manufacturing Employment Index came short of 43 with 42.1. On Thursday, the US non-farm payrolls outperformed 3 million with 4.8 million. The unemployment rate also outshone 12.3% with 11.1% while (YoY) wage growth missed 5.3% with 5%. In Canada, the GDP for April changed by -11.6% compared to an expected change of -13% (MoM).

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

Technically, the USD/CAD currency pair appears to be trading within a slightly ascending channel in the 60-min chart. This indicates a short-term bullish bias in the market sentiment. The pair appears to have recently pulled back before finding support on the trendline. 

The bulls will be targeting short-term profits at around 1.3624 or higher at 1.3697. On the other hand, the bears will look to pounce on short-term pullback profits at around 1.3498 or lower at 1.3423.

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. This indicates a long-term bearish bias in the market sentiment. The pair is now trading closer to the 200-day SMA down below with the 100-day counterpart up top.

The bears will look to extend the current declines towards 76.40% Fib level at 1.3357 or lower at 1.3101. On the other hand, the bulls will target long-term rebound profits at around 50% and 38.20% Fib levels at 1.3806 and 1.4011, respectively.

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