The Bank of Canada will likely keep rates unchanged when they announce their rate decision at 10 AM ET. However, traders will be focused on expectations for future rate hikes from their statement.
Ahead of the decision, the USDCAD has moved down to the lowest level since November 19. The price is also moved away from the 38.2% retracement of the move up from the October 27 low at 1.26413. That will also corresponded with a swing low going back to November 25. Through the interest rate decision, a move back above that 38.2% retracement would tilt the bias more to the upside.
On the downside, the pair is approaching a swing area between 1.25758 and 1.26038 (there are a number of swing levels in that area - see green numbered circles). At the low of that range sits the 100 day moving average AND 50% retracement, at the 1.25758 level. Getting below that level would increase the bearish bias from a technical perspective.