USD/CAD Tracks March Opening Range Ahead Of BoC Rate Decision

With that said, USD/CAD may continue to track the monthly opening range if the BoC rate decision generates a limited reaction, butthe bearish price seen in 2020 may also materialize throughout this year as especially as the exchange rate struggles to hold above the 50-Day SMA (1.2702).

USD/CAD RATE DAILY CHART

Image of USD/CAD rate daily chart

Source: Trading View

  • Keep in mind, USD/CAD cleared the January 2020 low (1.2957) following the US election, with the exchange rate trading to fresh yearly lows in November and December as the Relative Strength Index (RSI) established a downward trend during the same period.
  • USD/CAD started off 2021 by taking out last year’s low (1.2688) even though the RSI broke out of the bearish formation, with lack of momentum to hold above the 1.2770 (38.2% expansion) region pushing the exchange rate briefly below the Fibonacci overlap around 1.2620 (50% retracement) to 1.2650 (78.6% expansion).
  • A break/close below the Fibonacci overlap around 1.2620 (50% retracement) to 1.2650 (78.6% expansion) materialized in February, which pushed USD/CAD to fresh yearly lows, and advance from the February low (1.2468) may turn out to be correction in the broader trend rather than a change in behavior as the exchange rate struggles to hold above the 50-Day SMA (1.2702).
  • It remains to be seen if USD/CAD will continue to respond to the moving average like the price action seen earlier this year, but need a close below the Fibonacci overlap around 1.2620 (50% retracement) to 1.2650 (78.6% expansion) to bring the 1.2510 (78.6% retracement) region back on the radar, with the next area of interest comes in around 1.2440 (23.6% expansion).
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