The USD/CAD currency pair rebounded on Wednesday to extend weekly gains above 1.3310 following the latest round of US data. The currency pair had pulled back over the last two days after notching new monthly highs of about 1.3338 last week. And now, it looks set to retest these levels before the end of the week if the current rebound carries on through Thursday and Friday.
In general terms, the USD/CAD currency pair continues to trade in an ascending channel, which indicates a short-term bullish bias as per the 60-minute chart.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of another round of US economic data including the Consumers Price Index and the RedBook Index among others.
On Tuesday, the US Consumer Price Index (Core) came in at 263.569 beating expectations of 263.282 for July (seasonally adjusted). The non-seasonally adjusted figure beat with 256.571 versus an expectation of 256.442.
And on Wednesday, the US Import and Export beat with -1.8% versus -2.9% (YoY) and 0.2% versus and expectation of 0.0% (MoM) for imports while exports beat with 0.2% versus 0.0% (MoM) and -0.9% versus -1.4% (YoY).
As for the CAD, traders will be looking forward to tomorrow’s unemployment change report expected in the afternoon.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair appears to be experiencing a short-term bullish bias following the latest US data. The currency pair has recently rallied to trade within the overbought zone in the Relative Strength Index Indicator in the 60-min chart.
This could trigger a pullback, which will be exciting to the bears as they target profits around 1.3292 and 1.3272 levels. On the other hand, the bulls will hope that the current rebound can continue by targeting profits at around 1.3338 level.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the currency pair appears to be trading in a slightly bearish channel, which indicates a significant balance between the bulls and the bears. Currently, the USD/CAd currency pair appears to be on its way towards completing the fourth impulse in Elliot’s 1,2,3,4,5 Impulse Wave analysis.
This creates some exciting options for both the bulls and the bears. The bulls will target long-term profits at around 1.3427 and 1.3519 levels while the bears will be targeting the next pullback with profits opportunities at 1.3199 and 1.3115 levels.
In summary, the USD/CAD currency pair appears to have made a significant rebound in recent trading sessions, but based on the current trend, a pullback could be imminent.