The USDCAD price action is experiencing high volatility in today’s trading, following yesterday’s bounce between support and resistance levels.
Initially, the price moved upward, breaking above the 38.2% retracement level of the decline from the August high, which stood at 1.3633. However, after reaching a peak of 1.3647 in the Asian session, the momentum shifted, and the price rapidly fell. This downward move breached the 100-bar moving average on the 4-hour chart, which was at 1.3545, a level that previously stalled the decline during the fall yesterday. The break below this average was seen as bearish, but similar to the failed upside break, the downside break also failed to sustain.
Currently, the price is hovering around a cluster of moving averages between 1.3585 and 1.3589, comprising the 100 and 200-hour moving averages and the 100-day moving average. Nearby resistance is situated at 1.3622, while support on a potential break lower is found at 1.35643.
The market is struggling to interpret the implications of the 50 basis point rate cut by the Fed, contributing to the volatility. Additionally, the Canadian economy is showing signs of weakness, with a rising unemployment rate of 6.6% and declining inflation approaching 2.0%. To navigate this uncertainty, it’s essential to focus on technical risk-defining levels. By identifying key levels and understanding the underlying dynamics, traders can make informed decisions and set realistic targets. In this video, I will outline my key levels and provide insights into the current market situation.
This article was written by Greg Michalowski at www.forexlive.com. Source