The USD/CAD currency pair continues to face strong resistance around the 1.3340 level in a consolidative sideways pattern. The currency pair made a sharp climb last week to top 1.3348 but has since pulled back to trade at around 1.3330.
The pair continues to trade in an ascending channel, which indicates a short-term bullish bias. However, in the last few days, it has oscillated within the 1.3200 and 1.3340 levels due to a lack of upward momentum.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a busy week in North America. Yesterday, the US PPI missed expectations of 0.1% (MoM) change for September with -0.3% while the (YoY) figure of 1.4% was short of the expected change of 1.8%.
The US PPI ex-Food and Energy also missed estimates on both measures coming in at -0.3% (MoM) versus an expectation of 0.2% while the (YoY) change missed the consensus estimate of 2.3% with 2.0%. The US JOLTS Jobs Openings also disappointed on Wednesday with 7.051M versus an expectation of 7.191M.
On the other hand, Canada’s building permits for August beat the expected change of -1.0% with 6.1% while Housing Starts of 221.2k was also significantly better than the expected figure f 214.5k.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to have recently bounced off the oversold boundary following last week’s plunge. The currency pair now appears to be surging upwards towards the upper boundary to the overbought zone, but there is still much room to run.
Therefore, the bulls will be targeting short-term profits at around 1.3348 or higher at 1.3363. On the other hand, the bears will be targeting a major pullback towards 1.3315 or lower at the 1.3297 level.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to be trading under slight bearish pressure ina gently downward sloping wedge. This indicates that the bears are attempting to take control of the pair from the bulls who held control between September last year and the beginning of 2019.
Therefore, the bears will be targeting long-term profits at around 1.3269, 1.3219, or lower at 1.3142. On the other hand, the bulls will be looking to target profits at around 1.3385, 1.3458 or higher at 1.3536.
In summary, the USD/CAD currency pair appears to be trading under considerable bullish pressure in the short-term, but in the long-term, the bears still retain control.