• USD/CAD bulls are staying the course so far in early Asia.
• There is something for both the bulls and bears while below 1.3180. 

The Canadian dollar has been in the limelight ahead of the Bank of Canada policy announcement this week where the central bank is expected to raise its policy rate by three-quarters of a percentage point on Wednesday to a level of 3.25% in an effort to cool inflation.

This brings the technical landscape into focus as the US dollar surges to fresh bull cycle highs. The question is whether the greenback is about to throw in the towel or not and if so, there will be a compelling case for the downside in the pair. The following illustrates the 4-hour and 15 min time frames for a comprehensive perspective of the market structure and potential trajectory for the pair in the near and medium term.

USD/CAD H4 chart

The 4-hour outlook is a mixed bag and will depend upon the next moves in the greenback. However, with the price moving out of the trendline support, there is a case for the downside on a break of the highlighted support structures on the chart above. 1.3140 is the first key support area guarding 1.3120. A break of 1.3100 could be significant that may lead to a waterfall sell-off. On the other hand, should the bulls commit above 1.3120, then a bullish inverse head and shoulders could result in a continuation higher for the foreseeable future. 1.3180 is key in this regard. 

USD/CAD M15 chart

Meanwhile, the bulls remain in charge as we head towards the Tokyo session. The price has found support on the 15-minute 38.2% Fibonacci retracement of the recent bullish impulse and the price would be expected to continue higher. However, we have resistance overhead.