Failed on break below lower trend line
The USDCAD fell to a new month low earlier today. The prior low was on the 1st trading day of the month at 1.2450. The low today extended to 1.24432. The move could not extend to the July lows however at 1.2413.
Drilling to the hourly chart, near the lows was a lower trend line connecting recent lows. That trend line was broken around the 1.2450 level (old low from August). That should have sent the pair lower. It did not. The shorts covered.
What next?
The USDCAD trades between the trend lines. The upper trend line cuts across at 1.2507 (and moving lower). The 100 hour MA comes in at 1.2575. Last week that MA stalled the rally on Wednesday. On Friday, the trend line stalled the rally higher. So both are key for a continuation of bullish. Look for sellers to lean on the first tests.
Taking one more step down to the 5-minute, watch the 1.24800 as close risk now for buyers. Not only is it a broken 38.2% retracement, but it is also the close from Friday. The 100 bar MA - lower now but moving higher - is also moving toward that level.
