USD/CAD Price Analysis: Grinds below 1.3400 on BoC day

• USD/CAD holds lower ground on the Bank of Canada interest rate announcement day.
• Sluggish MACD, sideways performance near 38.2% Fibonacci retracement challenge bears.
• Convergence of 200-day EMA, support line from early June portrays strong support.
• Buyers need to cross descending resistance line from mid-October 2022.

USD/CAD portrays the typical pre-event anxiety as it makes rounds to 1.3370-60 during early Wednesday in Asia. In doing so, the Loonie seesaws near the 38.2% Fibonacci retracement level of the Loonie pair’s April-October upside amid the sluggish MACD signals.

It’s worth noting, however, that the USD/CAD pair appears clubbed between the 1.3250 support confluence and the descending resistance line from October 2022 near 1.3610. That said, the 200-day Exponential Moving Average (EMA) joins ascending trend line from June to highlight the 1.3250 as the short-term key support level.

Given the Bank of Canada’s (BoC) 0.25% rate hike already priced-in, the USD/CAD bears need either hawkish remarks from the BoC statement or the higher rate increase to extend its downturn.

Also read: Bank of Canada Preview: The final one, with a pause ahead?

In that case, the 1.3250 support confluence will gain the market’s attention, a break of which could direct the USD/CAD bears towards the 50% and 61.8% Fibonacci retracement levels, respectively near 1.3190 and the 1.3000 psychological magnet.

Alternatively, the previous weekly high of 1.3520 could gain the USD/CAD buyer’s attention in case of the pair’s recovery post-BoC.

Even so, a convergence of the multi-day-old resistance line and the 23.6% Fibonacci retracement level could challenge the Loonie pair’s further upside near 1.3610.

USD/CAD: Daily chart

Trend: Further downside expected