Trend line and 200 day MA
The USDCAD is trading in a narrow trading range today (34 pips. The 22-day average is 89 pips). No economic releases today. The price of WTI crude oil is trading in a 52.47-53.41 range, but is little changed currently at $52.75 (-$0.08).
The current price is trading at 1.3115 currently. The low extended to 1.1305. That was the lowest level since October 19th. Higher oil prices have helped weaken the pair (on the back of production cuts from OPEC and Non-OPEC countries).
Last week, the price fell below the 100 day MA, and closed below that MA line for the first time since September 8th. That is bearish. BUT the pair is getting closer to some pretty important support against a trend line support at 1.3087. Below that the 200 day MA at 1.30718 will be another key support level (green line in the chart above).
I expect that if the selling does continue, that those levels will be met with patient bids from patient buyers.
Fundamentally, I think that although there may be production cuts, the market will be skeptical that they stick (so oil rallies should be limited). A more hawkish Fed does not mean the BOC will follow. Gov Poloz has made that clear.
So I would expect traders to lean against the yellow area on dips with stops below.
What does the closer picture show?
Looking at the hourly chart, the price of the pair has "sidewayed" above the channel trend line. The momentum lower is slowing. A newer - less steep - trend line cuts across at 1.3128. A move above that level would be more bullish. If the price gets above that level, the 1.3151 would be the next target to get to and through. That level was the low from Friday and the high from yesterday.
