On the daily chart below for USDCAD, we can see that after the fast selloff since the break of the 1.3553 level, the price bounced near the 1.33 handle and rallied quickly back to the 1.3553 resistance. The moves in USD/CAD have been aggressive lately with rallies and selloffs extending for hundreds of pips with almost no pullbacks along the way.
In the bigger picture, the pair hasn’t been doing much as it’s still in a huge range between the 1.3225 support and the 1.39ish resistance. Both the central banks have been aggressive in their tightening cycle, and both are basically done on that front. The market is now focused on global growth and the if the central banks will need to hike again due to a persistently high inflation .
On the 4 hour chart below, we can see the recent quick ups and downs. The moving averages have crossed to the upside but it looks like the sellers have enough strength to push back down. The key levels here are clear: we have the resistance at 1.3553 and the support at 1.3301. Buyers and sellers will be attentive to those two levels if the price breaks out either of them as the subsequent move may be again fast and strong.
On the 1 hour chart below, we can see that after being rejected from the resistance at 1.3553, the price fell and made a lower low. This morning, we got a retest of a resistance level and now the sellers are in control and targeting the support zone at 1.3400 where we have also the 61.8% Fibonacci retracement level.
The moving averages on this timeframe show that the bias is bearish and from a risk management perspective, the buyers would be better off leaning on the 1.34 support zone with a defined risk just below it. The sellers, on the other hand, will need to break below the support zone to extend the fall towards the support at the 1.33 handle. Today, we have the US Retail Sales report and it’s expected to be a market moving event, so watch out for that.
