The US Dollar (USD) extended downside movement against the Canadian Dollar (CAD) on Wednesday, dragging the price of USDCAD to less than even 1.2750 ahead of some key economic events that are scheduled later in the New York session. The technical bias has already turned bullish due to a Higher Low and Higher High in the ongoing wave.
As of this writing, the pair is being traded around 1.2743. A hurdle may be noted near 1.2800-2804, the confluence of psychological number as well as intraday high of yesterday ahead of 1.2833, the high of the last major upside rally as demonstrated in the following daily chart.
On the downside, the pair is expected to find a support around 1.2715, the intraday low of yesterday ahead of 1.2126, the swing low of the last major dip. The technical bias will remain bullish as long as the 1.2126 support area is intact.
BoC Monetary Policy
The Bank of Canada (BoC) is due to release its monetary policy today during the early New York session. According to the median forecast of different economists, the central bank is likely to keep the benchmark interest rate unchanged at 0.75%. The interest rate decision will be followed by the release of monetary policy statement and BoC press conference. A hawkish tone about the interest rate could incite selling pressure in the price of USDCAD and vice versa.
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term if we get a bearish pin bar or bearish engulfing candle on the daily chart.