The USDCAD is down for the 4th day in a row after stalling on Wednesday at the high from September 1 near 1.32073 (not once but twice).
The fall on Wednesday took the price to test the 200 hour moving average (green line in the chart above). On Thursday, the price traded above and below its 100 and 200 hour moving averages before settling in a lower swing area between 1.3072 and 1.3094. On Friday, the price broke below that swing area took a breather near the 38.2% retracement of the move up from the August 11 low at 1.30237 before falling to the lowest level since August 30, and bouncing back higher selling right near the 38.2% retracement level at 1.30237.
Today, the price action has moved down to the 50% midpoint of the same move higher at 1.29670. That is also within a swing area between 1.2956 and 1.29707 (see red numbered circles).
What now?
The 50% midpoint is the key barometer. I like to think of it as the apex of the seesaw between more bullish more bearish. Having the swing area (see red numbered circles) where the market traded above and below near the same area increases the levels of importance. I'm not surprised after 4 days of declines, the price is finding some support buyers against the area. However on a break below I would expect selling to resume.
On the topside, should the price be able to hold the 50%, keep an eye the 1.3017 to 1.30237 area for the next technical clue.
Although the price traded above and below that level in the Asian session, the market was feeling out the next move. The sellers finally took control and pushed the price lower. A move back above that area would take the price back into positive territory for the day and also disappoint sellers looking for more downside momentum.
So the 50% is a low risk and bias defining trading level in the short term. Sellers from above want to see a break with more momentum. Dip buyers want to see it hold. The battle is on.
