Ahead of this week’s BoC meeting—the central bank is widely expected to remain on hold at 5.0%—the technical picture for the USD/CAD leans in favour of buyers for the time being.

Monthly, Daily and H1 Charts Echo Bullish Tone

From the monthly timeframe, we can clearly see the currency pair has formed a long-term consolidation between CAD1.4690 and CAD1.2092 since 2016. More locally, a range has also been in play between support at CAD1.3244 and resistance at CAD1.3818 since late 2022. It is also clear from the monthly chart that February closed out a second straight month in the green, with room to continue exploring higher terrain until range resistance at CAD1.3818.

Overall, then, bulls are in the driving seat for the time being.

The daily timeframe paints a slightly different picture. Although price is indeed advancing, upside momentum has been slowing. Not only is this depicted through price action compressing between two converging lines extended from CAD1.3359 and CAD1.3542 (rising wedge), but the Relative Strength Index (RSI) is chalking up negative divergence (see the resistance at 61.44).

So, while this remains a bullish market, daily resistance overhead at CAD1.3661 could test the grit of bulls this week.

Finally, on the H1 timeframe, the CAD1.36 handle welcomed sellers twice last week, delivering notable reactions each time. Beyond the CAD1.3541 low lies support at CAD1.3534, a level complemented by a moderate Fibonacci cluster around CAD1.3530. Any breakout below these supports unearths the CAD1.35 base.

USD/CAD This Week?

With the scope to nudge higher on the monthly and daily timeframes (daily resistance is a clear upside objective at CAD1.3661), a rebound from H1 support at CAD1.3534 should not raise too many technical eyebrows. However, knowing a H1 Fibonacci cluster resides nearby at CAD1.3530, a whipsaw of the H1 support is certainly movement worth pencilling in for those considering longs around this area.

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