Trades near the middle of the range and back near the 100 hour MA
The USDCAD has been trading in a red box since April 23rd on the hourly chart.
That box has 1.2898 on the topside and 1.2810 on the downside -a fairly narrow range for a 6 plus day period.
Yesterday, the sellers took the price below the lower extreme, the 200 hour MA and the 200 bar MA on the 4-hour chart (green lines) but quickly failed. The buyers took the price higher. I am not surprised. The break failed.
The move up took the price above the top extreme at 1.28984 to a high of 1.29134, but that break failed too. The price has come down. I am not surprised. The break failed.
What now?
We currently trade back in the middle of that range and near the 100 hour MA at 1.28517. The price has traded above and below that MA as the market figures out what it wants to do.
On the downside, there is a trend line at 1.28336 ahead of the low extreme from the red box.
On the topside, the high from yesterday at 1.2874, is ahead of the high extreme at 1.2898.
When the price consolidates like it has been doing, it says the market is unsure of what to do next. However, it will get a push at some point and that push can cause a run.
So it is the hope of what may happen next, that get's us excited.
While we consolidate, we can look to sell high, or buy low. In between we can buy against the trend line or sell on a break.
The goal is to take a shot against a risk defining level, and if it works, and if that leads to a break and run, great.
Alternatively, sit and wait and when the push comes, get onboard.
