The USDCAD has seen a move to the downside as US yields fall, stock prices rise and "risk on" sentiment flows are more dominant. All those things helped to strengthen the CAD (and weaken the USD).
The fall in the USDCAD (higher CAD) comes after a rise yesterday that saw the price of the USDCAD extend back above its 200 day moving average at 1.26212 (see green overlay line on the hourly chart above).
The price high today moved up to test its 50% midpoint level at 1.26511 and a swing area between 1.2645 to 1.26566. The high price briefly moved above that swing area but rotated back to the downside ahead of the CPI data. The relief from that data pushed the price back below the 200 day moving average (at 1.2621).
On the move to the downside, the USDCAD price did find some support buying against/near the rising 100 hour moving average (blue line in the chart above). That moving average currently comes in at 1.25871. The low price on a momentum move lower reached 1.2581 before bouncing back higher. The current price trades above and below the 1.2600 level - between the 200 day moving average above and the 100 hour moving average below.
With the buyers coming in near the 100 hour moving average, and sellers pushing below the 200 day moving average, the pair has defined the extremes for traders to lean against in the short term and define the risk/bias sentiment.
- A move back above the 200 day moving average is needed to give the buyers more control.
- Conversely a move below the 100 hour moving average below would be needed to give the sellers more control.
- In between and traders can play the range between support and resistance with stops on a break.
