The US Dollar (USD) extended upside movement against the Canadian Dollar (CAD) on Wednesday, increasing the price of USDCAD to more than 1.2400 ahead of Canada’s monetary police announcement which is scheduled today in the New York session. The technical bias however remains bearish due to a Lower Low in the recent dip.
As of this writing, the pair is being traded near 1.2428. A hurdle may be noted near 1.2478, the 61.8% fib level ahead of 1.2610, the 76.8% fib level and then 1.2824, the swing high of the last major upside rally as demonstrated in the following chart.
On the downside, the pair is likely to find a support around 1.2400, the psychological number ahead of 1.2371, the 50% fib level and then 1.1918, the swing low of the last major dip. The technical bias will remain bearish as long as the 1.2824 resistance area is intact.
Canada Monetary Policy
The Bank of Canada (BoC) will announce its benchmark interest rate decision that will be followed by the release of monetary policy statement today during the early New York session. According to the median projection of different economists, the interest rate will be kept steady at 0.75% amid low inflation and fragile growth outlook of the country. Investors will be eyeing the monetary policy statement very carefully for clues about future monetary policy outlook.
Considering the overall technical and fundamental outlook, selling the pair around current levels could be a good option if we get a major rejection in the form of bearish pin bar or bearish engulfing candle around 61.8% fib resistance area as explained above.
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