USD/CAD licks its wounds at monthly low within one-week-old descending trend channel.
BoC is expected to keep the interest rates unchanged, policy signals will be the key to follow for Loonie traders.
Steady RSI suggests slower grind towards the south, convergence of 100-HMA, channel’s top line prods bulls.
Three-week-long horizontal area and dovish BoC outlook holds the key for USD/CAD bull’s conviction.
USD/CAD aptly portrays the Loonie trader’s cautious mood ahead of the Bank of Canada (BoC) Interest Rate Decision as it pares recent losses around a multi-day low heading into Wednesday’s European session. That said, the quote stays defensive near the lowest level in a month despite recently picking up bids to 1.3405.
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Apart from the pre-BoC consolidation, the existence of a one-week-long bearish channel also keeps the USD/CAD bears hopeful.
That said, the steady RSI (14) line allows the USD/CAD pair to grind higher within a one-week-old bearish trend channel, currently between 1.3380 and 1.3445-50.
It’s worth noting that the 100-bar Hourly Moving Average (HMA) adds strength to the 1.3445-50 upside hurdle for the pair, a break of which could direct the pair buyers towards a convergence of the 200-HMA and 38.2% Fibonacci retracement level of the pair’s May 08-25 upside, near 1.3530.
Should the Loonie pair manages to remain firmer past 1.3530, backed by the dovish BoC outcome, a horizontal area comprising multiple levels marked since mid-April, near 1.3570, acts as the last defense of the USD/CAD bears.
On the contrary, a downside break of the stated channel’s bottom line, close to 1.3380 at the latest, won’t hesitate to challenge the previous monthly high of near 1.3315, a break of which could drag the Loonie pair price towards the yearly low marked in February around 1.3265.
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