The USD/CAD pair reached the 1.34925 level yesterday but suffered a downtrend. As of this analysis, it is trading near the 1.33460 mark.

In the last few hours, pressure on selling positions has been evident, even though support levels are in focus. However, investors await the Bank of Canada’s (BoC) interest rate decision. For now, there is a feeling that there will be no surprises.

If there are no surprises, this could set the stage for the US data, which is due for release on Thursday and Friday. The USD/CAD has been trading in a downtrend in recent trades, and there is a possibility of encountering support levels that will generate upward revisions for the coming hours or weeks.

It will also be necessary to analyze whether the release of the BoC report generates volatility. If so, volatility may affect the market in a short period of time, barring any news that catalyzes the market.

Technical analysis of USD/CAD today, January 24

The support level may be at 1.34400, although we must be vigilant because this level may generate uncertainty, especially if we are thinking of trading in the short term. If there are moves below this support, it could be from the lows seen at the beginning of the week between 1.34350 and 1.34200.

For now, it would be advisable to trade short because as we get closer to the data release time, this may cause the trading prices to spike sharply. It would also be important to manage risk with hedges to better protect against the volatility generated in the currency market. Doing risk management for the rest of the week does not hurt.

The market expects the Bank of Canada to maintain its interest rates. However, any change in that figure, if higher or lower than expected, could surprise the market and generate an immediate reaction in the USD/CAD price.

In the event of a rate cut, this could be in an attempt to stimulate growth in the Canadian economy.