The USD/CAD currency pair pulled off 4-week highs on Wednesday to trade at around 1.3252 after topping 1.3270 earlier in the day. The currency pair has been trading in an upward trending channel since the start of the month and this implies a short-term bullish bias in the market sentiment.

The latest pullback comes following a resurgence in oil prices which boosted the commodity-tied CAD. The currency pair ha snow pull off overbought levels of the RSI indicator in the 60-min chart.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively calm week in terms of economic data. On Wednesday, the US core Consumer Price Index for October missed expectations of 265.106 with 265.011. On the other hand, CPI ex-food and energy (MoM) for October was in line with expectations at 0.25 but missed on (YoY) with 2.3% versus 2.4%.

The NFIB Business Optimism Index missed the expectation of 103.5 with 102.4 while the monthly budget statement for October also came short of expectations at -$134B versus -$133B down from $83B in the previous period.

On the other hand, Oil prices have recovered again with the WTI Crude Oil topping  $57.12 while Brent Crude traded at $62.37 on Wednesday. This has boosted the CAD because of its reliance on commodity prices, especially oil prices.

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

From a technical perspective, the USD/CAD currency pair appears to be trading under considerable bullish pressure in the short-term trading market as it continues to oscillate in an ascending channel. The currency pair is several pips above the 100-hour and the 200-hour SMA lines, which supports the bullish outlook.

Therefore, given Wednesday’s short pullback, the bulls will be targeting short-term profits at around 1.3270 or higher at 1.3295. On the other hand, the bears will be looking to pounce on profits at around 1.3235 or lower at 1.3212.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair still appears to be trading under considerable bearish pressure in a consolidative descending wedge. The pair recently rebounded off the key support at 1.3036 and now appears to be targeting 1.3344 for a pullback.

Therefore, the bulls will be targeting long-term profits at around 1.3344 or higher at 1.3433 while the bulls will hope for an immediate pullback towards 1.3147 or lower at 1.3036.