The USD/CAD currency pair on Thursday surged to trade at a new monthly high of about 1.3388 before pulling back late on to settle at 1.3320. This came following the latest round of preliminary US GDP data for Q3.

The currency pair appears to be on course to complete XABCD reversal pattern formation after bottoming at around 1.3100 on October 21. Today’s rally pushed the pair closer to overbought levels of the 14-hour RSI before pulling back late on.

USD/CAD Fundamentals Overview

From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in both markets. In the US, the preliminary core personal consumption expenditure for Q3 missed the expected (QoQ) change of 4% with a change of 3.5%. The preliminary annualized gross domestic product for Q3 outperformed the expectation of 31% with a change of 33.1%. 

The preliminary gross domestic price index for the quarter also beat 2.8% with 3.7% while the initial jobless claims for the week ending Oct. 23 came in lower at 751k versus the expected claims of 775k. On the other hand, continuing claims were slightly higher than the expected level at 7.756M versus 7.7M.

In Canada, the Bank of Canada voted to keep the base interest rate at 0.25% on Wednesday. On Thursday, building permits for September soared 17% (MoM) compared to the previous month’s change of 1.4%.

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

Technically, the USD/CAD currency pair appears to be close to completing a XABCD double-bottom reversal pattern in the 60-min chart. This indicates an attempt by the bulls to take control of the market in the short-term.

They will be targeting short-term profits at around 1.3388 or higher at 1.3456 going into Friday. On the other hand, the bears will look to pounce on short-term pullback profits at around 1.3235 or lower at 1.3137.

USD/CAD Technical Analysis (the Daily Chart)

In the daily chart, the USD/CAD currency pair on Thursday continued to trade within a descending channel. The pair appears to be attempting a breakout from the channel, but the bears retain long-term control. 

The bulls will be looking to ride the current rebound by targeting long-term profits at around 61.80% and 50% Fib levels at 1.3604 and 1.3806, respectively. On the other hand, the bears will target long-term profits at around 1.3040 or lower at 1.2775.