USDCAD spikes higher and comes back down. What next for the pair technically?

Arguably, there is nothing worse than getting fundamental news that is bullish – like the US retail sales data today. Then have the dollar move higher as it did in USDCAD, but then nearly as fast, reverse all the way down,and retrace the gains.

However, part of trading is defining targets. In the USDCAD, the pair moved up to a swing area target between 1.3687 and 1.3700. The high price reached 1.3702 just above the high of that target, and buyer started to turn into sellers.

Now the price has moved back below its 100 and 200-hour moving averages at 1.3635 and 1.36412 respectively. Technically staying below those levels now keeps the sellers more in control.

Like on the top side, a target must be defined below. Looking at the hourly chart, there is support between 1.35998 and 1.366125. Getting below those levels (while staying below the 200-hour moving average at 1.36412) would increase the bearish bias.

Technicals matter. That includes shifts in the bias, and targets that need to be reached. Make sure you understand both when trading.

This article was written by Greg Michalowski at Source