In an earlier post I pointed out the holding of the 100/200 bar MA on the 4-hour chart and the non-trending nature of the market (see post here).
The price of the USDCAD has now moved outside the "red box" where most of the price action has taken place over the last 3-4 weeks. The price has now moved below the lower end of that box between 1.25203-273. Traders will now start to use that area as risk. They won't want to see the price reenter the red box IF the sellers are taking control.
Now on the downside, the low has just reached 1.24991. That is just below the low from last week at 1.25015. It is also just below the 50% of the move up from the March 2021 low at 1.25052. There is some buying against that low. However, my focus is up at the 1.2520-273 area. Stay below keeps the sellers in control.
Drilling to the hourly chart below, I commented in the prior post that the cluster of the 100/200 hour MAs along with the 100/200 bar MA on the 4 hour, had to remain broken. That is what happened (see test of the 100 hour MA line in the chart below). That was a bearish clue - along with the clue from the 4 hour MAs - that gave sellers the confidence to trend more to the downside. Since holding the 100/200 bar MA on the 4-hour, the pair has moved 75 pips over 4 hourly bars that moved straight lower.
The clue now is can the sellers stay outside the "red box". If so, there is more to go to the downside.