We know the 100 hour MA will be key below
The USDCAD has moved to new highs for the week and now has traded at the highest level since March 18th when the price peaked for the year at 1.2833. That is the next major target on the topside. A move above that level opens the upside with the high price from 2009 at the 1.3063 as the next target.
The Bank of Canada is expected to cut rates by 25 basis points but it is a close call. The market rally to the highs suggests perhaps the cut is being priced in. At least that makes the most sense.
The rally higher may also be inspired by the technical action on the hourly chart. Looking at that chart, the pair - for second day in a row - tried to break below the 100 hour MA (blue line in the chart below), but quickly failed (I am not sure you can call it a break - it was more of a peak).
That is good to know with an event coming up. If the Bank of Canada surprises and keeps rates unchanged, that 100 hour MA will be a key target below. A move below should solicit more selling.
Of course another level below will be the 200 hour MA (green line in the chart below) and the upward sloping trend line.
To put things into perspective, the 200 hour MA and trend line would imply a range for the day of about 112 pips. That is not that much a range. The average over the last month is 103 pips but this would be off a no change when most are expecting a change in rates. As a result, I would expect the 200 hour MA is in certainly in play on a no change decision. Keep that in mind.
PS a break of the 100 hour MA should turn that MA into resistance. What was support becomes resistance. .
