Forex technical analysis: USDCAD has cluster of support at 1.2892 today

Technical Analysis

Author: Greg Michalowski | usdcad

100 and 200 hour MA/50% retracement

The existing home sales in Canada once again came out looking pretty good at +3.1%.  The better data has taken the USDCAD down a bit. Overall, the pair has been more negative for the day after an earlier rise to levels above the highs from Friday, failed. Crude oil prices are trading higher today at $47.41 /+2.62% on the day. This too should help the loonie (weaken the USDCAD).

The pair is not racing lower. In fact, the London lows have not been broken at 1.29005 level (you always get worried about support at a big figure line 1.2900).  In addition to the 1.2900 natural support level, the pair has a cluster of support near the 1.2889-1.2892 level.  The 100 and 200 hour MA and the 50% retracement all converge in the area . That should slow the decline, but the fundamentals with weaker US/stronger CAD and higher oil, should be a negative influence.    

Looking at the daily chart, keep the 1.2831-60 level in focus. The level was a swing high in March and a swing lows in July and October.  Admittedly, the pair has been trading above and below the level in trading in April and also May. Last week the price fell below the area on the break to the low for the week. But on Friday, the low was 1.2834 - just above the lower extreme at 1.2831 and Wednesday, the low just squeaked below the level at 1.2829. So there is some signs of support.  Keep the level in mind should there be some further downside this week.  If tested - and holds  - that would be more bullish for the pair.

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