USDCAD is trending higher inside a rising channel visible on its daily time frame. This channel has been holding since August last year and price could be ready to resume the climb.

The pair also broke above a symmetrical triangle consolidation pattern to signal that a climb is due. This could also complete the formation of an inverse head and shoulders, with the neckline around the 1.3500 mark. A break above the mid-channel area of interest at 1.3600 could also confirm stronger bullish momentum.

The 100 SMA is still above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse. The gap between the indicators has narrowed, though, so there could be weaker bullish momentum and even a potential bearish crossover.

RSI is pointing up to suggest that there’s some bullish pressure left for more gains, but the oscillator is also nearing the overbought zone to reflect exhaustion. Stochastic is heading up to indicate that buyers have the upper hand for now but could see overbought conditions soon. Turning lower could also draw the pair back to the bottom of the channel at 1.3400.

The upside break is being attributed to the more dovish tone shared by the BOC during their statement this week. The central bank seemed to shrug off upside surprises in trade and spending data for the past months and are bracing themselves for an economic slowdown instead. The Loonie also likely took some hits from the surprise build in crude oil inventories last week.

Meanwhile, the dollar has the advance GDP report for Q1 to look forward to on Friday. Analysts expect to see another 2.2% expansion but recent figures suggest a possible downside surprise, with the price component also predicted to fall from 1.8% to 1.3%.