• USD/CAD bulls need to get above 1.3460 to break the resistance structure.
• Focus is on the BoC for the week ahead. 
•  There are prospects of a move through the 38.2% ratio into the 1.3560s.

USD/CAD has been holding in familiar ranges with the CAD benefitting from a rise in oil prices while the market assesses the prospects of the Bank of Canada starting up the interest rate hiking campaign again this week. 

Money markets see a roughly 45% chance of the central bank raising rates.  Traders will be waiting today Reserve Bank of Australia closely as well for prospects of a prelude to the event. A surprisingly strong performance from the Canadian economy will make for a tough choice for the central bank´s Governor, Tiff Macklem.

´´We look for the BoC to step off the sidelines with another 25bp hike to 4.75% in June,´´ analysts at TD Securities said:

´´Economic data has remained resilient, and the Bank's conditional pause is looking less tenable without clear evidence of a material slowdown in the first half of 2023.´´

´´We look for a relatively hawkish statement, with the Bank leaving the door open to further tightening in the coming months.´´

Meanwhile, the US Dollar index cut early gains to trade little changed around 104 on Monday. A weaker ISM services print weighed:

 ´´The May ISM Services index fell 1.6pts to 50.3, below consensus of a lift to 52.4. That is the survey’s lowest reading since the initial onset of the pandemic, except for December last year which was affected by severe weather conditions,´´ analysts at ANZ Bank explained. ´´The print will undoubtedly fan expectations that the largest sector of economic activity may finally be responding to Fed tightening.´´  

The Greenback had otherwise enjoyed the Nonfarm Payrolls and a remarkable 339K jobs in May. However, the Unemployment Rate rose by 0.3 percentage points to 3.7% and hourly wage growth slowed. Around 80% of market participants expect the Fed to leave rates steady when it meets next week.