The USD/CAD currency pair rebounded late on Friday to cut weekly losses after testing new multi-month lows. The pair fell to the lowest level since the end of February, signifying this week’s Fed statement which was viewed to be dovish by traders.
The currency pair continues to trade within a downward trending channel in the short-term, which indicates that the immediate outlook could be bearish.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a busy week. Oil prices recovered slightly this week to boost the loonie against the greenback. And later in the week, the US Federal Reserve issued a statement, which indicated that there could be a rate cut at some point this year.
And with the Jobs numbers for last month missing expectations by a landslide, the greenback could continue to experience pressure from its main rivals going into next week. Trade tensions are also putting a strain on the US Dollar, which again hands the advantage to the Canadian Dollar.
USD/CAD Technical Analysis (the 60-min Chart)
From a technical viewpoint, the USD/CAD currency pair recently bounced off 1.3154, the lowest level it has traded since the end of February this year. The pair’s short-term outlook remains relatively bearish judging by the descending channel, but rebound late on Friday could continue through next week.
As such, the bulls will target profits at around 1.3227 or higher at 1.3253 while the bears will be hoping for an immediate pullback towards 1.3185 or lower to 1.3154.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the picture is rather different, with the USD/CAD currency pair appearing to enjoy a long-term bullish bias within an ascending channel. And looking at the end of that channel, the USD/CAD appears to have recently tested the key support trendline, which triggered Friday’s rebound.
This could indicate a move by the bears to cover or the bulls moving in to buy in anticipation of a rebound back up.
In summary, the USD/CAD currency pair continues to trade at the back of what has been a positive week for the loonie. The greenback could strike back next week but the bears will claim control for now.