The USDCAD price action can be paralleled to a misbehaving child. You never know what may happen next. Sometimes there is a pattern you can predict, and other times, you simply don’t know what you might get.
Today, the USDCAD initially moved lower using moving averages as topside resistance. In the early US session there was a spike higher which took the price above those moving averages (see higher blueline currently chart below). That should have been more bullish and sent the price higher. Instead the price break failed, and the pair has since rotated back to the downside.
THat is in the short term. Over the last few weeks, the price has been moving up and down with lots of volatility as well. When the price looks like it’s going to move higher, it turns around and rotates back to the downside. When the price moves lower it reverses and goes back higher.
Last week the price tried to extend to the downside not once but twice and each chart failed to remember the break failed. Misbehaving.
Sometimes you just have to deal with at misbehaving of a market, and just take clues from failures. Ultimately even the most misbehaving children can get in line and learn. That is how I feel about the USDCAD price action.
This article was written by Greg Michalowski at www.forexlive.com. Source