USDCAD breaks 100 hour moving average

The USDCAD has broken below the 100 hour MA (blue line in the chart above), after finding support against it on the prior hourly bars. The break below the MA line triggered stops and the price has scooted lower toward the next support level at the 1.24181 level. This is the 38.2% retracement of the move up from the January 14 low to the January 30 high.

On a break of that level, there are still a number of targets that need to be breached. The 1.2393, the 1.2375, the 1.23509 and 1.2300 level are all prior lows post the surprise BOC interest rate cut on January 21. I would expect that there will be buyers on the dip. The wild card is oil price as this pair has been largely influenced by the price of oil. Crude oil futures are up on the day today, and that is contributing to the CAD strength in trading today. Nevertheless, a move to the downside should be a tough sledding..

Given the tend like move lower, sellers on the break would like to see the corrections to show that the sellers remain in control. I like to use the 38.2% to 50% retracement of the trend move lower as a proxy for control. Stay below the yellow area in the sellers remaining control. Move above that area (from 1.24582-1.24678) and those sellers of the break lower, will start to feel a little more uncomfortable with their positions.

Bias lower on the break of the 100 hour MA. For shorts, lets see if the next targets can be breached.