Sellers take back control below the 100 hour moving average
The USDCAD moved higher in early trading today extending the late gains seen in the USD on the Trump comments.
That move took the price above its 50% retracement of the move down from last week’s high and the 200 hour moving average. Both of those levels where near the 1.3330 level. The high reached 1.33397.
However momentum could not be sustained and the buyers turned to sellers.
That move lower took the price initially to the 100 hour moving average (blue line) in the European morning session. After a bounce to the 38.2% retracement at 1.33093, the price declined continued into the North American session. The price has moved below its 100 hour moving average again at 1.32873 (see blue line in the chart above).
The inability to stay above the 200 hour moving average/50% retracement and the fall back below the 100 hour moving average tilted the bias back to the downside. The sellers are more control below the 100 hour moving average.
If the price can stay below, the next targets come in at 1.3266 (low from October 1) and the low from yesterday’s trade at 1.32413.
Taking a broader look at the daily chart below, the price high from the end of September stalled at a topside trend line near 1.3418 (see red numbered circles in the chart below). Buyers could not take the price above the resistance target nor the falling 100 day moving average (blue line in the chart below).
The subsequent fall has taken the price through the 38.2% retracement on Monday and Tuesday at 1.32557. However the price rebound yesterday on the Trump news moved the pair back above that target.
On more weakness today, getting and staying below the 38.2 at 1.32557 is more bearish. A break of the low this week would target the 50% retracement 1.32056.