The USDCAD yesterday moved below its 100 day moving average and 50% midpoint of the move up from the July low at 1.3397 and 1.3393 respectively after stronger-than-expected CPI data out of Canada. However, sellers turned to buyers, after the failed break, and the price moved back higher yesterday and into today (see 4 hour chart below).
That rally today stalled right at the 200 day moving average (green line in the chart below) and the broken 38.2% retracement of the same move higher from the July 2023 low near 1.3464. Since then, the price has rotated lower and trades near the lows for the day currently.
On the decline, The price is moving closer to a cluster of support defined by the
- Low of a swing area at 1.3404,
- The aforementioned 100 day moving average at 1.3397, and the
- 50% midpoint at 1.3393.
The combination of the cluster of levels should provide strong support. I expect support buyers to lean against the level, with stops on a break below.
If broken again, there should be further downside momentum with the low from yesterday and the low going back to August 10 at 1.3370 as the next targets.
This article was written by Greg Michalowski at www.forexlive.com. Source