Breaks 100 hour MA too but can the momentum be maintained?
The USDCAD has moved higher in trading today. The rally (lower CAD) runs counter to the price of oil which is up 1.77% today. It tends to support the CAD and in contrast to the employment fundamentals. The BOC is meeting next week and the expectations are they will increase by 0.25 basis points.
Technically, the pair moved up to the 1.24773 level which was just below the 1.24807 low from the employment day on Friday when job growth was much stronger than expectations in Canada. On the move higher, the price did breach a downward sloping trend line, and the 100 hour MA (blue line in the chart above) at 1.24623. That move above the 100 hour MA was the first breach since December 20th.
However, the move above the MA, has not really attracted much follow through buying and the price is currently trading back below the 1.24623 MA level.
It seems the market is questioning the move.
What would help the shorts from this point. For me if the price:
- Remained below 1.24807
- Moved and stayed below the 100 hour MA, and
- Moved back below the broke trend line at 1.2430 (and moving lower)
Those steps would put the sellers back in firm control. Failure to do those things will give the corrective buyers more upside potential with the 200 hour MA at 1.2513 (and moving lower) an upside target.
Right now, the sellers are trying to take back more control. Stay below the 100 hour MA is a step in that bearish direction.