The USDCAD currency pair is trading at a five-month high of approximately 1.36556 and is approaching the level of 1.3670, as it is anticipated that the Bank of Canada will maintain its current interest rates.

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• USD/CAD refreshes a five-month high near 1.3670 as the BoC is expected to keep interest rates unchanged.

The pair currently trades last at 1.36556.

The previous day high was 1.3605 while the previous day low was 1.3576. The daily 38.2% Fib levels comes at 1.3587, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3593, expected to provide support.

The USD/CAD pair prints a fresh five-month high at 1.3670 ahead of the interest rate decision by the Bank of Canada (BoC), which will be announced on Wednesday. Investors anticipate that the policy divergence between the Federal Reserve (Fed) and the BoC will remain stable as the latter is expected to keep the monetary policy unchanged.

BoC Governor Tiff Macklem might keep interest rates unchanged at 5% as hiring and consumer spending slowed due to higher inflationary pressures.

S&P500 futures posted nominal losses in the European session, indicating a cautious opening after an extended weekend. The US Dollar Index (DXY) prints a fresh five-month higher at 104.70 as US recession fears receded due to cooling inflation and a stable job market. The 10-year US Treasury yields climb to near 4.23%. A power-pack action is anticipated from the USD Index in the New York session as US markets will open after a long weekend.

USD/CAD extends its rally and prints a fresh five-month high at 1.3670. The pair recovered sharply after sensing decent buying interest near the 20-day Exponential Moving Average (EMA) around 1.3520. The Relative Strength Index (RSI) (14) trades in the bullish range of 60.00-80.00, and is not showing signs of oversold and divergence.

For more upside, the Loonie asset needs to surpass the round-level resistance of 1.3700 decisively, which will open doors for further upside to March 27 high at 1.3746 and March 24 high around 1.3800.

On the flip side, a breakdown below September 1 low around 1.3490 would drag the asset towards August 15 low around 1.3440, followed by July 7 high at 1.3387.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3651 at the time of writing. Pair opened at 1.3591 and is trading with a change of 0.44 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.3525, 50 SMA 1.3355, 100 SMA @ 1.3398 and 200 SMA @ 1.3464.

The previous day high was 1.3605 while the previous day low was 1.3576. The daily 38.2% Fib levels comes at 1.3587, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3593, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3576, 1.3561, 1.3547
• Pivot resistance is noted at 1.3605, 1.362, 1.3634

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