On Thursday, the USD/CAD currency pair pulled back from the session highs of about 1.4046 to trade at about 1.4005. The currency pair trades within a descending channel formation on the 60-minute chart.
The pair continues to trade a few levels below the 100-hour moving average line after the pullback. As a result, the currency pair is on the verge of entering the oversold levels of the 14-hour RSI.
USD/CAD Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair trades during a relatively busy period in both markets. In Canada, the consumer price index for September came in lower than expected at 0.1% versus 0.2% (MoM), up from -0.1% in August. The (YoY) equivalent also rose to 3.1%, up from 3.0% in the previous month, but fell below the forecast of 3.2%.
On the other hand, the Bank of Canada’s core CPI for the month fell to 0.0% (MoM), down from 0.1% in August. The (YoY) equivalent fell to 2.2%, down from 2.4%. Looking forward, traders will be waiting for the Canadian retail sales data for September on Friday.
In the US, the initial jobless claims for last week fell to 194k, down from the previous week’s revised figure of 200k, and below the forecast of 200k. Earlier in the week, the US building permits for September came in better than expected at 1.4 million, versus a forecast of 1.39 million, down from the previous month’s equivalent of 1.403 million.
On the other hand, housing starts for the period fell short of 1.3 million, with a tally of 1.221 million, down from the preceding month’s equivalent of 1.288 million. Elsewhere, the pending home sales for September missed the expected (MoM) change of -0.5%, with a change of -7.3%.
USD/CAD Technical Analysis (the 60-min Chart)
Technically, the USD/CAD currency pair trades within a descending channel formation on the 60-minute chart. The 14-hour RSI has also plummeted to trade closer to oversold conditions.
Therefore, the bears will look to extend the current run of declines toward 1.3963 or lower, down to 1.3916. On the other hand, the bulls will look to pounce on rebounds at about 1.4046 or higher, up to 1.4090.
USD/CAD Technical Analysis (the Daily Chart)
In the daily chart, the USD/CAD currency pair trades within a sideways channel formation. However, the 14-day RSI has recently pulled back to recover from overbought conditions.
Therefore, the bears will look to extend the current pullback towards 1.3722 or lower, down to 1.3480. On the other hand, the bulls will look to pounce on rebounds at about 1.4288 or higher, up to 1.4523.
