The 200 day MA holds support at the 200 day MA for the 2nd time this month
The USDCAD tests its 200 day moving average for the 2nd time this month. The 1st test was on the 1st day of February. The price moved above the 200 day moving average on the last day of January and successfully tested that moving average on February 3. Today, the 200 day moving average comes in at 1.3217. The low for the day reached 1.3215 (close enough). Last week the high price stalled right near the November high price and started a rotation back to the downside.
Drilling down to the hourly chart, the bounce off the 200 day moving average is seeing more upside momentum. The price just cracked back above its 100 hour moving average at 1.32467. Stay above that level now and we could see more upside momentum. The 38.2% retracement of the move down from last week's high comes in at 1.32582. Above that and the falling 200 hour moving average comes in at 1.32671. The close from yesterday was at 1.32566. Getting back above that level would also be positive for buyers.
The USDCADs move to the downside was not in line with the USDs move higher. You can blame the break below in the 100 hour moving average earlier in the Asian session as a reason to sell. However, the holding of the 200 day moving average was the invitation to jump on the dollar buying bandwagon. The question now is can the momentum continue?
Stocks moving higher is helping the dollar. Also the US being insulated (so far) from the coronavirus directly, is helping flows into the greenback.
The stock markets are ignoring the implications of slower China growth and supply chain issues. Apple which was lower yesterday after announcing revenues would be lower, is currently trading up $4 or 1.28% - outpacing the market gains.
The outlier in the risk on story is gold which continues to be supported. It is currently trading up $5.46 or 0.34% at $1607. Yesterday the price moved up about $20 on the day.
