The USD/CAD currency pair pulled back on Friday to trim this week’s gains by more than 50%. The pair had rallied from a low of about 1.3287 to trade within touching distance of the current monthly high of about 1.3403 when it hit 1.3395 on Thursday afternoon.

However, those gains were quickly erased on Friday morning with the currency pair falling to hit a session low of 1.3324 in the process clearing more than 50% of this week’s gains.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is driven by the strength of the US economy and the geopolitical climate between the US and China, the oil prices.

Recently, oil prices have rallied to trade within touching distance of $65 per barrel (WTI Crude Oil), while Brent is now trading at well above $71 per barrel. This will continue to boost the strength of the Loonie (CAD).

On the other hand, the US jobless claims data continues to point towards a strong US labor market despite the Federal Reserve’s cautious approach to interest rates in 2019.

USD/CAD Technical Analysis (the 240-min Chart)

Technically, the USD/CAD currency pair appears to be trading within a converging sideways wedge in the 240-min chart, which suggests that the pair could breakout soon. Based on the current position of the pair, the current pullback looks set to continue momentarily before a rebound can be triggered.

As such, the bears will look to pounce for opportunities around the 1.3310 level, or slightly lower at 1.3287. On the other hand, the bulls will hope for an immediate rebound by targeting profits at around, 1.3360 level or a little higher at 1.3400.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the picture does not change much apart from the fact the pair now appears to be trading within an upward trending channel. After breaking out from this channel in November last year during a major bull-run, the pair now appears to have tracked back to the normal trading range within the channel.

This creates multiple opportunities for both the bulls and the bears. The bulls will target opportunities at around 1.3376, just above the 50% Fib level while the bears will look to strike at around 1.3280, just below the 38.20% Fib level.

In summary, the USD/CAD currency pair appears to be destined for a short-term bearish movement following today’s pullback but the bulls maintain control in the long-term.