The USD/CAD currency pair on Wednesday spiked to trade at a new 2-week high of about 1.3208 after the latest round of US data. The currency pair spent most of the week trading in a consolidative sideways movement before Wednesday’s big jump.
The pair later pulled back to settle at around 1.3160 after hitting overbought levels of the RSI indicator in the 60-min chart. A continuation of the pullback can be expected on Thursday pending the impact of key economic data.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a big boost following the latest round of economic data. The latest data for Pending home sales came out better than expected after posting a change of 3.9% (YoY) and 1.5% (MoM) for September.
Core Personal Expenditure beat the expectation of 2.1% with 2.2% while the ADP employment change posted 125k jobs versus the expectation of 120k jobs. Gross Domestic Product for Q3 also beat expectations on an annualized basis with 1.9% versus 1.7%.
On the other hand, the highly awaited interest rate decision from the Bank of Canada came in line with expectations after the BoC held the base interest rate unchanged at 1.75%.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to have made a major breakout in the 60-min chart, which indicates a short-term bullish bias. The currency pair spent a lot of time in a sideways channel over the last 10 days but that now appears to be changing.
Therefore, the bulls will be targeting short-term profits at around 1.3185, 1.3200 or higher at 1.3234. On the other hand, the bears will be hoping for an immediate pullback towards 1.3135, 1.3100 or lower at 1.3082.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair appears to have recently completed a XABCD pattern formation, which culminated with the pair’s latest bullish breakout. This could be a signal for a potential trend reversal, which could get traders excited going into the tail-end of the month.
The bulls will target long-term profits at around 1.3254, 1.3307 or higher at 1.3351. On the other hand, the bears will hope for an immediate pullback by targeting long-term profits at around 1.3121, 1.3059 or lower at 1.3014.