The USDCAD is moving higher and trading at the highest level for the year,and going back to 2020. The buyers are in firm control and that comes ahead of the BOC meeting and interest rate decision scheduled for 9:45 AM ET tomorrow. The BOC is expected to cut rates by 50 basis which is helping to weaken the CAD and supporting the USDCAD.
So fundamentally the buyers are favored.
However, markets get overbought. There is always the possibility of a corrective move that can be disruptive to the trend.
As a result, it is important to understand the levels that would tilt the bias lower at least in the short term for the pair. If the price can get below those targets, the sellers can claim a technical victory. Moreover, it helps to give the buyers a cause for pause.
Looking at the hourly chart, the first target would be at 1.4145. That level was a corrective high after the high from earlier in November. In trading on Friday and again yesterday, it was a swing level of importance (see red numbered circles on the chart below).
Move below that level – and stay below – and the sellers can claim a technical victory, at least in the short term.
Another target area comes in between 1.4088 to 1.4105. Yesterday, the price moved into that area and found support buyers. The price bounced higher.
Absent those types of moves and the buyers are still in firm control. The trend is still to the upside.
This article was written by Greg Michalowski at www.forexlive.com. Source