Daily close above 1.3200 is critical, BOC in focus

USD/CAD remains capped by 1.3200 – critical resistance.
Daily chart paints a bleak picture amid bearish RSI.
Path of least resistance appears to the downside ahead of BOC.

USD/CAD is challenging a critical resistance of 1.3200 in Asian trading this Monday, benefiting from broad-based US dollar recovery and the persistent weakness seen in WTI prices.

The bulls are awaiting a daily close above the aforesaid powerful barrier, which is the convergence of the 21 and 50-daily moving averages (DMA), for a sustained move high.

The next upside target is seen at Tuesday’s high of 1.3212.

The 14-day Relative Strength Index (RSI) trades flat but below the midline, keeping the sellers hopeful. Also, the spot trades below all the major DMAs, adding credence to the bearish bias.

The 1.3150 psychological level could challenge the bears’ commitment, below which the October 23 low of 1.3109 could be put to test.

The Bank of Canada (BOC) monetary policy decision will be closely eyed to gauge the near-term direction in the prices.