The USD/CAD currency pair spiked on Tuesday to top 1.3265 after the latest round of US data triggered a rebound. The pair has been trading within a consolidative sideways pattern (1.3200-1.3235) since the start of the month breaking through this channel only on two occasions.

From a wider view, the USD/CAD appears to be enjoying strong short-term bullish bias as it continues to trade within an ascending channel that stretches back to the middle of last month.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading after another busy start to the week. On Monday, both the US Markit PMI Composite and the Services PMI beat expectations of 51.6 and 52.2 respectively with 52.6 and 53.0.

However, the 3-month and the 6-month bill auction rates fell to 1.99 and 1.950 respectively from the previous week’s rates of 2.07% and 2.035%. In addition, the ISM non-manufacturing PMI missed expectations with 53.7 versus an expectation of 55.5.

And on Tuesday, the US Redbook Index came posted 5.1% growth YoY from the previous period’s 4.5%. The MoM equivalent came in at 1.1% up from 1.0%. JOLTS Job Openings beat with 7.348M (Jun) versus 7.17M while the IBD/TIPP Economic Optimism MoM (Aug) beat with 55.1 versus an expectation of 54.6.

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

From a technical view, the USD/CAD currency pair appears to be trading within an ascending channel, which indicates a short-term bullish bias. 

The pair today came within touching distance of slipping to the overbought zone in the Relative Strength Index indicator and this could trigger a pullback in the coming days.

Going into Wednesday, the bulls will target short-term profits at around 1.3282. However, the bears will be more optimistic of a pullback and they could target profits at around 1.3233 or even lower at 1.3193.

USD/CAd Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair appears to have recently dropped outside an ascending wedge. However, it now looks to be making an attempt to resume the initial trading zone after finding strong support around the 1.3100 level.

In the long-term, the bulls will target profits at around 1.3429 while the bears will look forward to another pullback by targeting profits at around 1.3100.

In summary, the USD/CAD currency pair appears to be enjoying a short-term bullish bias but in the long-term, the battle is closer and more unpredictable.