Not an easy one to figure out

Fundamentally for the USDCAD:

  • US employment weak. (USDCAD bearish). No Canada employment today (next week) Expectations 0.0K net change in employment after -1.0K last month. Not much going on there economically (USDCAD bullish)
  • Oil. Iran nuclear decision and embargo lifting will open up the world to more oil supply. That should keep oil depressed which is bullish for USDCAD.
  • If US catches a cold, won't Canada too?

So fundamentally, I can see a mixed bag.

Technically, the price tumbled below trend line support on the daily chart above at the 1.2477 level. This is now close resistance. Stay below and the bears remain in control. Move above and that water gets more murky.

On the downside, the consolidation seen over the last few months have left a number of swing lows. One level that sticks out is the 1.2386 level. This price represents the low close for the USDCAD going back to January 23, 2015. There has been 5 moves below that level (all in January and February) and no closes below. The low price from February 26 came in at that level, and held. Lows in March, were above at 1.24055 and 1.24097 respectively (this is another level to get and stay below).

If the price is going to go lower, the 1.2405/09 followed by 1.2386 will need to be broken (and remained broken).

Friday's low? Only 1.2428. I get the feeling the desire to break out is not there. .

Looking at the 4 hour chart, the move lower today tested, then fell below trend line support. The low price stalled above the prior lows and the price is back higher and is looking to have a higher close on the current bar. That low would look rather suspect.

IF this price is to go down, there needs to be sellers at the 1.2477 level. If the price is to go lower, we need to see 1.2426, 1.2409 and 1.2386 all broken and stay broken. That might be difficult to do. In any case, the map is drawn. will the correction find the sellers? If it cannot, and the pair gets back above the 1.2500 level, the sellers could become buyers and we could head right back where it all started in this pair.