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Denis Sergienko • 2022-02-09

USDCAD hovers inside fortnight-long rectangle, BOC’s Macklem eyed

USDCAD hovers inside fortnight-long rectangle, BOC’s Macklem eyed

USDCAD remains chopped inside a 140-pip trading range in the last two weeks, recently fading the bounce off the lower end comprising 200-SMA. Given the steady RSI and a pullback in oil prices, Canada’s key export, the Loonie pair is up for further recovery. However, comments from the Bank of Canada (BOC) Governor Tiff Macklem will be crucial to watch for intraday directions. That said, the recovery moves will initially be challenged by the 61.8% Fibonacci retracement (Fibo.) of late December-January declines, around 1.2770. Following that, a convergence of the stated range and the monthly resistance line near 1.2790 and the 1.2800 threshold will challenge the USDCAD bulls. In a case where the Loonie prices cross the 1.2800 hurdle, January’s high of 1.2813 may act as a validation point for the rally targeting the late 2021 peak of 1.2963.

Alternatively, pullback moves remain elusive beyond the stated range’s support, around 1.2650. Even if the quote drops below 1.2650, the 100-SMA level surrounding 1.2630 will challenge the downside before directing the USDCAD bears towards the 23.6% Fibo. near 1.2565. During the quote’s weakness past 1.2565, January’s bottom of 1.2450 will be in focus.

Overall, USDCAD has more downside filters than the otherwise case, which in turn can tease bulls for a quick rule on the upbeat outcome.

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