The USDCAD experienced a decline following the release of the US CPI data, briefly dropping below a key support level near 1.35478. However, it quickly rebounded, surpassing several important technical indicators: the 200-hour moving average at 1.3567, the 100-hour moving average at 1.3583, and the 100-day moving average at 1.3590. The 100-day moving average now serves as a pivotal support and a critical level for determining the stance of buyers. Maintaining a position above this level is a bullish indicator.
On the upper side, the currency pair’s peak for the day was within a notable resistance zone, ranging between 1.3613 and 1.36224, and reached a high of 1.3616. This area also includes the 38.2% Fibonacci retracement of the downward move from the high on November 10, located at 1.36224. For buyers to assert more control, a sustained move above this 38.2% retracement level is necessary. Last week, the price approached this retracement level but didn’t surpass it, with the highest point reaching 1.38186. Thus, while buyers are showing initiative, they need to breach the 38.2% retracement to solidify their position.
The key risk factor to watch is the 100-day moving average at 1.35902. This level is also an attractive entry point for those looking to buy on dips, provided they set a stop-loss order just below the moving average to manage risk effectively.
This article was written by Greg Michalowski at www.forexlive.com. Source