USDCAD skims along trend line support

The USDCAD moved to a new low going back to November in trading today taking out the low from last week at 1.32986. The low extended to 1.3288, which also moved briefly below a upward sloping trendline on the daily chart (see chart above). That trend line cuts across at 1.3290. Buyers have been skimming along that line at the two separate lows today (the recent North American low reached 1.32913).

The price of the USDCAD has moved higher after the ISM data showed higher inflation , and the employment component remained above the 50 level. The JOLTs job openings also remains elevated at 11.012 million which was much higher than the 10.25 million expected. That cancels out the ADP report which was weaker, although the ADP report is more timely (for January). The JOLTS is for December, but it nevertheless still remains nearer highs and suggests, although employers are cutting back, there are still other sectors that are not.

Drilling down to the hourly chart below, through the FOMC rate decision, the 100 and 200 hour moving averages are in play to the upside. The 100 hour moving average currently comes in at 1.3341 (and moving lower – see blue line). The 200 hour moving averages at 1.33616 and also moving lower (see green line).

There is also a swing area between 1.3339 and 1.3358 (see red numbered circles on the chart below). That swing area is near the moving averages and add to the areas importance through the FOMC rate decision. Move above, and the bias in the short term shifts to more upside for the pair once again. The 50% of the move down from the January 19 high at 1.34039 would be the next upside target on a further move higher.

USDCAD bounces higher but remains below 100/200H MAs

SUMMARY. Support held on the daily chart today near 1.3290 trend line. A move below opens the door for more downside momentum.

The inability to extend below that level, keeps the buyers in play. However, they will need to get back above the 100 and 200 hour