The USDCAD tumbled lower on Friday after the much better than expected Canadian employment report. A large net jobs gain of 153,000 (vs 35,000 estimate), and a sharply lower unemployment rate (6.0% vs 6.6% estimate) led to a quick run to the downside.
However, dip buyers leaned against the 200 hour moving average (green line) for the 2nd time in the week (dip buyers also bought against the MA on Wednesday) and the price closed near the high for the day at 1.28533.
Today, the sellers have returned. The previous highs from last week between 1.2828 and 1.2836 stalled the rally, and more recently, sellers have taken the price back below the 100 hour moving average (currently at 1.2798 - see blue line).
If the price can now stay below the 100 hour moving average, a test of the rising 200 hour moving average at 1.27579 would be the next major target. Needless to say, with support buyers leaning against that moving average level on both Wednesday and Friday, the precedent has been set for dip buyers to lean once again. However if the level should be broken, I would expect stops be triggered, and the price to probe further to the downside.
Other downside targets would include the
- Friday low at 1.27428, and the
- Low from last week at 1.27105
The 38.2% retracement of the move up from the October 26 low is another target on further weakness. That level comes in at 1.26413 which is also near swing lows going back to November 24 of November 25 before the last move higher in the pair.