Looks to test 38.2% of the move up from July 2014 low
The USDCAD is trading below the lowest close since January 19th, 2014. The most recent close was at 1.2013. The low for the day has come in at 1.1992.
Also on the radar for targets is the 38.2% of the move up from the July 3rd 2014 low. That level comes in at 1.1988. In both April and May the pair fell below the retracement level on one single day, but each failed to develop downside momentum. The total time spent below the 38.2% retracement? 6 hours over those two break days.
Note from the hourly chart below, there were 3 other tests of the area where the price bounced - this is the 4th (see blue circles in the chart below). So in total, there were 3 test of the 1.1288 level where the price bounced, and two that broke with momentum taking the price to lows of 1.1943 and 1.1939.
As a result, this is a key test for the pair. A break below and traders will be looking for further momentum and staying below the 1.2000 level. Holding the 1.1988 and a move back above the 1.2000 and 1.2013 (low close) will be likely be enough to confirm it is the 4th bounce. Traders will then be looking for the rotation higher.
Key moment for the pair. Shorts remain in control.
