- USD/CAD witnessed some selling for the second consecutive session on Wednesday.
- The intraday downfall showed some resilience below the 1.2700 round-figure mark.
- Neutral oscillators warrant caution for aggressive traders ahead of the BoC decision.
The USD/CAD pair remained under some selling pressure for the second consecutive session on Wednesday and extended this week’s rejection slide from the 1.2800 mark. The mentioned level represents a two-month-old descending trend-line resistance and a subsequent fall below 200-hour SMA might have prompted some follow-through selling.
The intraday slide, however, showed some resilience below the 1.2700 mark, allowing the USD/CAD pair to rebound around 25 pips from daily swing lows. Some repositioning trade ahead of the latest BoC monetary policy decision – due later this Wednesday – seemed to be the only factor that forced investors to lighten their bearish bears.
Meanwhile, neutral technical indicators on hourly/daily charts haven’t been supportive of a firm directional bias and thus, warrant some caution for aggressive traders. Heading into the BoC event risk, any subsequent slide below the 1.2700 mark might find decent support and remain limited near the 1.2670-65 horizontal support.
Sustained weakness below will be seen as a fresh trigger for bearish traders and turn the USD/CAD pair vulnerable to resume its recent well-established bearish trend. The downward trajectory might then drag the major back towards multi-year lows support, around the 1.2630-25 region en-route the 1.2600 round-figure mark.
On the flip side, immediate strong resistance is pegged near the 1.2765 region, above which bulls are likely to make a fresh attempt to conquer the 1.2800 mark. Some follow-through buying will negate any near-term bearish bias, rather prompt some short-covering move and push the USD/CAD pair further beyond monthly swing highs, around the 1.2835 region.
USD/CAD 1-hourly chart