• USDCAD prints fresh highs but has tough time closing above 1.3830
• Technical signals reflect fragile buying sentiment
• BoC rate decision due on Wednesday at 13:45 GMT

USDCAD reached a new high of 1.3848 on Monday, but it pulled back to end the day just below that crucial 1.3830 level, which aligns with the 78.6% Fibonacci retracement of the August-September downtrend.

With the RSI hanging around the 70 overbought mark and the MACD hovering near its October 2023 highs, a significant rally in the short term seems uncertain. Hence, for a solid move above the August bar of 1.3874 and the 1.3900 psychological level, the bulls will need new tailwinds, particularly if they want to crawl towards the 2022 high of 1.3976.

In any case, traders may want to keep their positions unless they see a correction below the 1.3780 area. If that happens, the spotlight may shift to the 61.8% Fibonacci level at 1.3743 and the support line at 1.3730. If the price doesn’t bounce back from there, the decline could continue towards the 20-day exponential moving average at 1.3690  and then down to the 50-day EMA around 1.3660.

In summary, it looks like USDCAD has some challenges ahead. Strong buying is needed for a close above the 1.3874-1.3900 range, while a drop below 1.3780 might spark the next bearish wave.