The USDCAD moved sharply higher yesterday and in the process broke outside of a up-and-down trading range mainly between 1.3344 and 1.3444. The break gave buyers the go-ahead to push the upside. Near the end of the day, the 100 day moving average was tested and found sellers on the first look (see blue step line in the chart above).

USDCAD backs off after break of 100 day MA fails

In the early Asian session, the price backed off against the 100 day moving average but found support near 1.3483 and was able to extend above the 100 day moving average for the first time since January 9. However another swing area between 1.35121 and 1.35261 (see red numbered circles on the hourly chart above), found sellers. In the European morning session, the price ping-pong between a swing area at 1.3483 to 1.3488 and the swing area above (1.3512 to 1.3526).

More recently in the North American session, sellers started to take more control after the buyers failed to ignite much momentum above the 100 day moving average. The USDCAD price moved down to a low of 1.3453 which was just above the high of the swing area from the "Red Box" at 1.3444. The low also corresponded with the high price from last week at 1.3454 (that high was quickly rejected).

The current price is trading at 1.3471 between the swing area defined by the blue numbered circles to the topside, and the swing area defined by the green numbered circles to the downside.

If the buyers were for real yesterday on the break outside of the red box that can find the pair for eight trading days, that area should not be reentered.

Having said that there is work to do to the upside as well after the failed break above the 100 day moving average today. For now, however, buy against the high of the lower swing area with a stop on a break below. Then home for a move above 1.3488 and the 100 day moving average/50% retracement at 1.35024. Stay above those levels in the upside can be explored.