Peter Smith
The USD/CAD pair is basically stuck in neutral around 1.3720 during Tuesday's US trading hours, and honestly, it's been a pretty quiet day for the loonie. Sure, technical signals are hinting that the selling pressure might be running out of gas, but don't get too excited just yet – the bears are still calling the shots, and that 1.3700 level is where all the action's happening right now.
USD/CAD Chart Still Looking Pretty Ugly for Bulls
Let's be real here – USD/CAD has been getting hammered since March, and the technical picture isn't exactly screaming "buy me." The pair's been stuck in this nasty downtrend, making lower highs and lower lows like clockwork. It's textbook bearish action, and traders who've been betting against it have been laughing all the way to the bank.
Right now, 1.3700 is acting like a brick wall on the downside – it's been holding up pretty well lately, but that doesn't mean it's bulletproof. If this level finally gives way, we're probably looking at a trip down to 1.3600, which lines up nicely with the bottom of that descending channel everyone's been watching. And if 1.3600 can't hold? Well, then we might see some real fireworks with 1.3520-1.3500 coming into play.
On the flip side, any bounce worth talking about would need to get past that 21-day moving average sitting at 1.3832 – and that thing's been like kryptonite to bulls lately. Break above 1.3850 and the channel top, and maybe we can start talking about the bears losing their grip. Hell, if momentum really picks up, 1.4000 might even come back into the conversation.
USD/CAD Traders Playing Wait-and-See Before BoC Decision
The Canadian dollar's been holding its own pretty well against the greenback on Tuesday, with USD/CAD basically moving sideways around 1.3720 during the US session. Earlier today, we saw the dollar try to stage a comeback, but it fizzled out despite getting some help from a better-than-expected JOLTS job openings report.
Everyone's pretty much sitting on their hands right now, waiting to see what the Bank of Canada does on Wednesday. Most folks are betting they'll keep rates where they are, but you never know with central banks – they love throwing curveballs when you least expect it.
The whole setup here is pretty fascinating when you think about it. You've got weakening momentum signals, this crucial 1.3700 support that's been doing its job, and then this BoC meeting hanging over everything like a storm cloud. It's one of those moments where the stars might be aligning for something big to happen.
If 1.3700 finally cracks, we could see USD/CAD make a beeline for 1.3600 and potentially beyond. But if it holds and we get some positive vibes from the BoC (or lack of dovish surprises), we might just see those bargain hunters I mentioned earlier start to poke their heads up. Either way, this 1.3700 level is going to be the make-or-break point for what happens next.
Peter Smith
