The USD/CAD currency pair on Thursday failed to make headways after bouncing off new multi-week lows on Wednesday. The currency pair has been trading on a descending channel which indicates a bearish bias in the short-term market sentiment.
The currency pair is now pegged well below the current 100-hour and 200-hour SMA lines going into the tail-end of the week.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a busy period in both the US and the Canadian markets. In the US, the preliminary Markit Manufacturing PMI for December came in line with expectations at 52 while the Services and Composite PMIs outperformed estimates.
Building Permits, Housing Starts and Industrial Production also came out better than expected but the Philadelphia Fed Manufacturing Survey for December, the initial jobless claims (last week), and existing home sales for November (MoM) came short of expectations.
On the other hand, in Canada, the BoC’s Consumer Price Index change for November (MoM) came in line with expectations at 0.2% as did the (YoY) change at 2.2%. However, Retails Sales ex-Autos for October missed the expectation of 0.3% with -0.5% down from -0.1% in the previous period.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to be experiencing short-term bearish bias in the market sentiment. The pair appears to have recently completed a head-and-shoulders reversal pattern coming off a major rally last month.
Therefore, bulls will be targeting short-term profits at around 1.3139 while the bears will be looking to strike at 1.3100.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to be trading ina slightly descending wedge coming off a major rally that extends back to late 2017. The pair has maintained a relative bearish movement since the start of 2019 and this appears set to continue through the end of the year.
Therefore, the bears will be targeting long-term profits at around 1.3020, 1.2917 or lower at 1.2794. On the other hand, the bulls will hope for an immediate rebound towards 1.3223 or higher at 1.3330.