USD/CAD Price Analysis: Remains confined in a multi-day old trading range, below 1.3100 mark

• USD/CAD regains some positive traction but the upside remains capped.
• Traders are likely to remain on the sidelines ahead of BoC on Wednesday.

The USD/CAD pair held on to its mildly positive tone through the early North-American session on Tuesday, albeit struggled to make it through the 1.3075-80 strong horizontal resistance.

The mentioned barrier marks the top end of the recent trading range held over the past one week or so, which seemed to constitute towards the formation of a rectangle on the daily chart.

The lower end of the mentioned trading range coincides with the 23.6% Fibonacci level of the 1.3323-1.2943 downfall and should now act as a key pivotal point for short-term traders.

On the upside, any attempted positive move might continue to confront some fresh supply around the 1.3100 round-figure mark – also nearing the 38.2% Fibo. level – and cap gains.

A sustained break through the mentioned handle might prompt some aggressive short-covering move and lift the pair further towards 61.8% Fibo. level resistance near the 1.3175-80 region.

Meanwhile, oscillators on hourly charts have been gaining some positive traction but are yet to catch up with the recent bounce on the daily chart and warrant caution for aggressive traders.

Hence, it will be prudent to wait for a sustained break through the said trading range before positioning for the pair's next leg of a directional move ahead of the BoC policy update on Wednesday.

USD/CAD daily chart