The USD/CAD currency pair pulled back on Friday after the midweek rally took it towards the current yearly highs of about 1.3500.
The pair is now back around the 1.3421 level but remains within an ascending wedge which appears to be carrying a bullish bias on the lower trendline.
The latest pullback comes at the back of the US non-farm payrolls and the Federal Reserves comment on interest rates.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair had shown some promise in the midweek following the Federal Reserve’s comment on interest rates, where the indication was that there won’t be any hikes or cuts this year.
And on Friday, the NFP jobs data showed that the labor market created 263,000 jobs in April, well above expectations of about 183,000.
However, wage growth was slightly below expectation, which could be why the USD/CAD currency pair rejected to retest the current yearly highs.
USD/CAD Technical Analysis (the 240-min Chart)
Technically, the pair’s rejection of the current yearly highs appears to have created some interesting prospects for both the bulls and the bears. This is illustrated using the Fibonacci Retracements in the 240-min chart above.
The bulls will look to target opportunities at around 1.3500, which is just a few pips below the current yearly high. The Fib key level of 76.40% is also a few paces above.
On the other hand, the bears will target profits at around 1.3370, which coincides with the 38.20% Fib retracement level.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair’s bullish bias is once again confirmed. The bulls will remain confident when placing long-term trades. The pair has been trading within an ascending channel since July last year and this does not look like it will change soon.
The current mini-channel suggests a case of short-term consolidation just above the lower trendline of the main channel. This creates multiple trading opportunities for the bulls but the bears will look to pounce on any pullbacks the pair undergoes.
In summary, the USD/CAD currency pair appears to be benefitting from the stronger greenback compared to the weaker loonie. The oil price-pegged loonie has edged lower recently after oil prices checked back while the US Dollar looks to draw strength from NFPs.