....but momentum fades. Trades back toward the 100 hour MA
The USDCAD traded at the highest level since August 31 today at 1.2538. The pair has been chopping higher since bottoming on September 8th at 1.20612. The BOC raised rates on September 6th sending the price down to the lows, but comments have not been as hawkish since then and the loonie has weakened. Today BOCs Leduc said that growth rate should be slower in the next few quarters.
Technically, the price rise is still contained. The pair remains well below the 38.2% retracement of the move down this year at 1.27225. The swing high from August 31 comes in at 1.2662.
However what I like on the daily is we are back above the pre-September hike high at 1.2414 (high on Sept 6th) and the swing low from July at 1.2411. That area is home to a number of swing level (see red circles in the chart above). Being above is more bullish for the pair. A move below would be more bearish. Be aware.
Drilling to the hourly chart, the pairs move higher has been able to climb with the 100 and 200 hour MA providing support (green and blue MAs). The last few tests of the 100 hour MA stalled the falls.
We are now down testing that MA at 1.24795. Stay above and the bulls are more in control.
Move below and the 200 hour MA at 1.24128 will be targeted. That is also home to a number of swing levels (see red circles in the chart below). That area matches the swing level from the daily chart too increasing that area's importance.
So the momentum fades today but we are fading into the first support level. If that level is breached, the bias is a little more bearish. However, a stronger level of support at 1.2411-14 will be eyed. That level will likely be key vote of confidence either for the bulls or the bears on a test.
