USD/CAD continues to hold around resistance around 1.3360
The pair is holding at the upper end of the swing region resistance around 1.3340-60 but upside is also being limited by the 76.4 retracement level @ 1.3384. These key resistance levels are continuing to keep a lid on price action as the focus now turns towards the BOC meeting later today at 1500 GMT.
The Canadian central bank is expected to keep rates unchanged but the question will be whether or not they take a more dovish stance in light of recent developments in the economy. Last Friday's GDP report wasn't pretty and if anything, it will continue to suggest tailwinds for the economy as we begin the new year.
Hence, depending on the language used by the central bank to communicate their cautious approach, that will set the tone for how the loonie will react later.
As for key levels on the charts, an upside move in USD/CAD will gain further traction upon a break of the 1.3384 level. Further resistance is then only seen at the early December highs around 1.3425 and 1.3445.
Meanwhile, the key downside level to watch out for will be the 100-day MA (red line) @ 1.3276. That will be a notable level as a break below that will see the bullish bias in the pair relinquished. Of note, the 100-hour MA also sits at the level @ 1.3274 so that will play a part in defining near-term bias in the pair as well.
