USDCAD again battle with the resistance line of an upward sloping trend channel since late October 2021. Given the rebound in oil prices and RSI pullback, the Loonie pair is likely to witness further declines ahead of the key data/events from Canada. That said, a three-week-old support line and the 100-DMA, respectively around 1.3000 and 1.2860, appear strong challenges for the short-term bears. Also acting as important support is the previous monthly low near 1.2730-25. It should be noted, however, that the quote’s weakness past 1.2725 remains elusive unless the sellers defy the bullish channel, via a downside break of the 1.2600 support.
Meanwhile, a successful upside break of the stated channel’s resistance line, at 1.3180 by the press time, will defy the bullish chart pattern. Following that, the yearly top marked in August, close to 1.3225, will precede the 61.8% Fibonacci Expansion (FE) of October 2021 to August 2022 moves near 1.3300 should challenge the bears. In a case where the USDCAD bulls dominate beyond 1.3300, highs marked during October and September of the last year, around 1.3390 and 1.3420 in that order, will be in focus.
Overall, USDCAD bulls are running out of steam ahead of the all-important Bank of Canada (BOC) rate hike and the monthly employment data from Canada.