The USDCAD initially saw an increase after weaker-than-expected CPI data this morning (see post here), causing the CAD to weaken (higher USDCAD). However, the momentum quickly faded, and the price dropped below a critical floor near the 50% midpoint at 1.36511 (see green number circles). Despite briefly reaching a low of 1.3643, the price bounced back above the 50% and swing area between 1.36579 and 1.3665. Sellers turned into buyers, resulting in a sharp upward movement over the last two hours. It appears that buyers took advantage of stops below 1.3651 before reversing course and pushing higher.
This upward move has propelled the price back above the 100-hour moving average at 1.37163 (blue line) and towards the 200-hour moving average (green line) at 1.37353. The price is currently testing this moving average line. Above that, and there is a swing area between 1.3738 and 1.3752 that must be surpassed to grant buyers further control in the market.
On the downside, a decline back below the 100-hour moving average and the broken 38.2% retracement at 1.3700 would disappoint buyers. For now, buyers are attempting to regain control but need to overcome the 200-hour moving average. Keep an eye on these key levels to understand the direction of the USDCAD today and in the coming sessions.
