The USDCAD is trading to a new session low for the day as corrective price declines after the sharp run higher continues today.
Looking at the hourly chart, the pair yesterday shot higher and extended above the 100 and 200 hour MAs (blue and green lines) currently at 1.2813 and 1.2845.
The move to the upside also extended above the 38.2% retracement of the move down from the July 15 high at 1.29166 and extended into a swing area up to 1.29371. However, in trading today, sellers started to lean against that 38.2% retracement in the London morning session, and have pushed lower into the North American session.
The pair is now approaching some key support against its 200 hour moving average (green line in the chart above). As mentioned, the price broke above both the 100 hour moving average and 200 hour moving average yesterday increasing the bullish bias.
Now traders will be looking for support against that higher 200 hour moving average at 1.28467. Stay above and the price can rotate back higher. Move below and traders will start to look toward 1.28315 followed by the 100 hour moving average at 1.28131.
Will the buyers come in against the 200 hour moving average? Risk can be defined and limited against the level.
However what is also true is that the run to the upside could not sustain the momentum in trading today. It's a bit disappointing that the 38.2% retracement break could not be sustained.
