The USDCAD spiked higher on the tariff news at the start of the day (see the spike higher on the 5-minute chart above). However, the USDCAD moved lower following stronger-than-expected Canadian jobs data. Buyers stepped in at earlier lows in the Asian session, but quickly found its footing as buyers emerged.
Technically, the pair dipped below the 100-hour moving average at 1.3675 on the decline, found support near the earlier session low. That bounce led initially to a retest of the 100-hour MA. However,, after breaking back above, sellers flipped to buyers. A second test of support on the 5-minute chart once again attracted demand, reinforcing bullish sentiment and giving buyers the confidence to push higher (see the hourly moving average overlay on the five minute chart above)
The price has now rebounded back to levels seen just before the data release, setting up a critical test. A move above 1.3700 and sustained trading above that level would open the door for further upside momentum. The next key target is the 38.2% retracement of the decline from the May high, which comes in at 1.37208. Notably, the high earlier today briefly spiked above that level following headlines about Canadian tariffs of 35%. A break and hold above 1.37208 would strengthen the bullish bias and signal a potential shift toward broader upside for USDCAD.
This article was written by Greg Michalowski at www.forexlive.com.