- The asset Loonie has turned sideways as investors await the BoC’s interest rate policy for fresh stimulus.
- The descending 20- and 50-EMAs indicate further weakness.
- Bearish momentum is triggered if the RSI (14) falls into the bearish range of 20.00-40.00.
The USD/CAD the pair oscillates in a narrow range of 1.3362-1.3374 in the Asian session as investors await the announcement interest rate decision from the Bank of Canada (BoC) for fresh stimulus. The risk profile shows mixed signals that may trigger volatility in the future.
S&P500 futures posted losses in early Asia and failed to extend Monday’s uptrend any further. US dollar index (DXY) extended losses below 101.55 ahead of US S&P PMI data. Meanwhile, yields on 10-year US Treasuries fell to nearly 3.51%.
USD/CAD fell sharply near the demand zone located in the range of 1.3324-1.3359 on the hourly scale. The Lonnie asset witnessed a massive sell-off after giving up the 1.3442 support. The downward-sloping 20- and 50-period exponential moving averages (EMA) at 1.3376 and 1.3397, respectively, are added to the downside filters.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating between 40.00-60.00. A breakdown of the RSI (14) into the bearish range of 20.00-40.00 will trigger a downward trend.
Going forward, the Loonie asset will witness weakness if it falls below the January 13 low of 1.3322. This exposes the asset for further weakness towards the November 18 low at 1.3300 and the November 15 low at 1.3226.
Alternatively, a break above the January 12 high at 1.3461 will take the asset to psychological resistance at 1.3500 followed by the January 6 low at 1.3540.