USD/CAD Price Analysis: More weakness looks possible below two-month low around 1.3320

• The Loonie asset has turned sideways as investors await BoC’s interest rate policy for fresh cues.
• Downward-sloping 20-and 50-EMAs indicate more weakness ahead.
• A bearish momentum will get triggered if RSI (14) drops into the bearish range of 20.00-40.00.

The USD/CAD pair is oscillating in a narrow range of 1.3362-1.3374 in the Asian session as investors are awaiting the announcement of the interest rate decision by the Bank of Canada (BoC) for fresh cues. The risk profile is demonstrating mixed signals, which might trigger volatility ahead.

S&P500 futures are showing losses in early Asia, failing to extend Monday’s bullish move further. The US Dollar Index (DXY) has extended its losses below 101.55 ahead of United States S&P PMI data. Meanwhile, the 10-year US Treasury yields have dropped to near 3.51%.

USD/CAD has dropped sharply to near the demand zone placed in a range of 1.3324-1.3359 on an hourly scale. The Lonnie asset witnessed a massive sell-off after surrendering the support of 1.3442. Downward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 1.3376 and 1.3397 respectively, add to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range. A breakdown of the RSI (14) into the bearish range of 20.00-40.00 will trigger the downside momentum.

Going forward, the Loonie asset will witness weakness if it drops below January 13 low at 1.3322. This will expose the asset for further weakness towards November 18 low at 1.3300 and November 15 low at 1.3226.

Alternatively, a break above January 12 high at 1.3461 will drive the asset towards the psychological resistance at 1.3500 followed by January 6 low at 1.3540.

USD/CAD hourly chart