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Technical Analysis: USDCAD bears keep the reins ahead of BOC

Not only extended downtrend below the key HMAs, namely the 100 and 200-HMA, but descending channel formation also favord the USDCAD bears ahead of the Bank of Canada's monetary policy meeting on Wednesday. Although the BOC isn't expected to alter its current monetary policy, any hawkish signals, which are more likely, can't be ruled out. The same can exert additional downside pressure on the quote towards testing the channel's support, at 1.2765 now. However, any further declines will make the pair vulnerable to plunge towards the 1.2700 threshold while ignoring May 2018 bottom near 1.2730.

Meanwhile, the stated channel's upper line and 100-HMA restricts the pair's short-term upside below 1.2830. Even if the USDCAD buyers manage to cross 1.2830, it's upside towards the 200-HMA level of 1.2900 is likely to be restricted by 1.2850 and the 1.2870 hurdles to the north. Additionally, the pair's sustained run-up past-1.2900 will look to regain the 1.3000 psychological magnet.

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