USD/CAD Price Analysis: Grinds below 1.3400 on BoC day
- USD/CAD holds lower ground on the Bank of Canada interest rate announcement day.
- Sluggish MACD, sideways performance near 38.2% Fibonacci retracement challenge bears.
- Convergence of 200-day EMA, support line from early June portrays strong support.
- Buyers need to cross descending resistance line from mid-October 2022.
USD/CAD portrays the typical pre-event anxiety as it makes rounds to 1.3370-60 during early Wednesday in Asia. In doing so, the Loonie make seesaws near the 38.2% Fibonacci retracement level of the Loonie pair’s April-October upside amid the sluggish MACD signals.
It’s worth noting, however, that the USD/CAD pair appears clubbed between the 1.3250 support confluence and the descending resistance line from October 2022 near 1.3610. That said, the 200-day Exponential Moving Average (EMA) joins ascending trend line from June to highlight the 1.3250 as the short-term key support level.
Given the Bank of Canada’s (BoC) 0.25% rate hike already priced-in, the USD/CAD bears need either hawkish remarks from the BoC statement or the higher rate increase to extend its downturn.
In that case, the 1.3250 support confluence will gain the market’s attention, a break of which could direct the USD/CAD bears towards the 50% and 61.8% Fibonacci retracement levels, respectively near 1.3190 and the 1.3000 psychological magnet.
Alternatively, the previous weekly high of 1.3520 could gain the USD/CAD buyer’s attention in case of the pair’s recovery post-BoC.
Even so, a convergence of the multi-day-old resistance line and the 23.6% Fibonacci retracement level could challenge the Loonie pair’s further upside near 1.3610.
USD/CAD: Daily chart
Trend: Further downside expected