The USDCAD trended lower as the price technically broke below its 200-day moving average near 1.3464. It’s 38.2% retracement of the move up from the July low was also broken near that level.
The run lower was also helped by higher CPI data, but after breaking below the 100-day moving average at 1.3398 and the 50% midpoint of the same move higher at 1.3393, sellers turned to buyers and the price corrected higher.
What next?
The price has moved up to test it falling 100 bar moving average on the 5-minute chart and the 50% midpoint of the last trend move lower intraday near 1.3431 (see 5-minute chart below). If sellers are to stay in control, staying below that area would be required. Absent that, there could be further upside momentum.
On the downside, the 100-day moving average at 1.3399 remains a key level that would need to be broken – and stay broken – to increase the bearish bias going forward.
This article was written by Greg Michalowski at www.forexlive.com. Source