The USD/CAD pair is striving to recover recent losses, edging higher to around 1.3470 during Asian trading hours on Wednesday, in anticipation of the Bank of Canada’s (BoC) upcoming interest rate decision.
Technical analysis of the Moving Average Convergence Divergence (MACD) for the USD/CAD pair indicates a potential bullish sentiment in the market. This interpretation is based on the MACD line’s position above the centerline and the presence of divergence above the signal line.
The USD/CAD pair may encounter an immediate barrier at the weekly high of 1.3491, followed by the psychological resistance level at 1.3500. Further potential upside is suggested by the lagging indicator 14-day Relative Strength Index (RSI), positioned above 50, confirming stronger momentum for the pair.
On the downside, the region around the 23.6% Fibonacci retracement level at 1.3454, aligned with the major level at 1.3450, is identified as the immediate support zone. A breakdown below this support could exert pressure on the USD/CAD pair to breach the 21-day Exponential Moving Average (EMA) at 1.3427, followed by the 38.2% Fibonacci retracement level at 1.3401.