USD/CAD Price Analysis: Loonie grinds within bearish channel, 1.3450 and BoC in focus

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.

Anil Panchal FXStreet

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.

Also read: USD/CAD braces for BoC near 1.3400 as Oil grinds higher, US Dollar struggles

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.

USD/CAD: Hourly chart

Trend: Bearish

Additional important levels

Overview
Today last price	1.3409
Today Daily Change	0.0005
Today Daily Change %	0.04%
Today daily open	1.3404

Trends
Daily SMA20	1.3509
Daily SMA50	1.3498
Daily SMA100	1.3518
Daily SMA200	1.3511

Levels
Previous Daily High	1.3452
Previous Daily Low	1.339
Previous Weekly High	1.3651
Previous Weekly Low	1.3407
Previous Monthly High	1.3655
Previous Monthly Low	1.3315
Daily Fibonacci 38.2%	1.3414
Daily Fibonacci 61.8%	1.3429
Daily Pivot Point S1	1.3379
Daily Pivot Point S2	1.3353
Daily Pivot Point S3	1.3316
Daily Pivot Point R1	1.3441
Daily Pivot Point R2	1.3478
Daily Pivot Point R3	1.3503

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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