February 4, 2023

USDCAD retraces Friday’s declines after bouncing off the 100 day moving average

USDCAD on the hourly chart tests a cluster of resistance

The USDCAD fell sharply on Friday on loonie buying. The sharp move to the downside saw the pair reach its 100 day moving average at 1.2624 (lower blue line in the chart above).. The low price reached 1.26193 at the low, but quickly rebounded.

Today, the low for the day reached 1.2627 which was just above the 100 day moving average today at 1.26252 (lower overlaid blue line in the hourly chart above).

The USDCAD rebound initially took the price toward 1.2686. However the last three hours of trading has seen a larger and quicker run to the upside. In doing so has retraced nearly all of the declines from Friday’s trading. The high price reached 1.2750 on Friday. The high price today just reached 1.27487(so far).

Technically on the topside, the price is approaching the 38.2% retracement of the move down from the December 20 high at 1.27506. The falling 100 hour moving average is also in play at 1.27548 (blue line in the hourly chart above). Both those technical levels – along with the high from Friday – should give traders some cause for pause, with stops on a break above.

On the downside moving back below the 1.27259 to 1.27301 area would give sellers against the resistance some relief. Getting below 1.2700 to 1.2710 would add to that relief.

As mentioned, move above the cluster of resistance (above 1.27548) would increase the bullish bias, and have traders looking toward the 1.2773 to 1.27819 area, followed by the falling 200 hour moving average at 1.2787 (green line).

Source link