USDCAD pushed higher in today’s session, breaking above the 200-hour MA at 1.37817 and the 100-day MA at 1.37876. From a technical perspective, those breaks should have been meaningful and set the stage for additional upside momentum. Instead, the rally quickly lost steam, and the price slipped back below both levels, leaving traders to question whether the move was simply overextended.
For USD sellers, CAD buyers, or risk-focused traders, the 100-day MA now serves as a clear level to lean against for short setups. A sustained move lower from here opens the door to the 38.2% retracement at 1.37626, with the 100-hour MA at 1.3754 providing the next downside target.
If price moves below both those levels, focus shifts to the 50% retracement, which would be the next logical support zone.
Recall that last week — the pair broke below the 50% retracement, but the momentum failed, and USDCAD based out before reversing higher.
Traders should be mindful of a similar outcome here. Failed breaks are something traders should be wary about technically. Nevertheless, if the buyers return and push above the 100 day MA, I would not mess with the short side (it represents the risk and bias defining level)
This article was written by Greg Michalowski at investinglive.com.