Seeing a modest bounce off the lows. Ivey PMI moves lower this month
The USDCAD fell sharply and quickly yesterday after the BOC "surprised" the market (it was a 41% chance), with a 0.25% rise to 1%. The price tumbled about 275 pips in the first minute. That's a huge move - especially since the pair was already trading near the year lows.
The low on my chart stalled at 1.2125. That may have been a little low compared to others, but it is within 10-12 pips from others (or so it seems).
The low today dipped down to 1.2137. That is close enough to a double bottom for the pair. We saw a modest bounce off the level (the high reached 1.2174, but have moved back lower. The Ivey PMI came in a at 56.3 today a bit lower that the prior month at 60.0. That provided a little support but we are now seeing sellers take the price back down for a retest of the lows. We currently trade at 1.2144.
Technically, the corrective move off the lows yesterday, stalled near the 38.2% of the trend move lower yesterday (see yellow area on the hourly chart above). That is good news for the sellers and not good news for the buyers. Why? On a trend move (yesterday to the downside) the counter trend dip buyers need to take back control. Getting about the 38.2-50% retracement is a proxy for control. The buyers could not get the price above that area. Sellers are the winners.
What would give the buyers some control now?
Drilling to the 5-minute chart below, the corrective move off the low today could only get to the 38.2% retracement. Once again, that magnitude of a corrective move just does not do it. The price is also below the 100 bar MA on the 5-minute chart (blue line at 1.2186 and moving lower). That too will be a barometer for control. Get above and the buyers are more in control. Stay below and they are not. It is that simple.
Can buyers lean against the low area (1.2125-36)?
They can and hope that the bottoms hold and bounce. However, if the area is broken, I would expect stops to be triggered. PS as I post the lows for the day lows are being broken, but the low from yesterday at 1.21258 remains in play. Key test for the dip buyers.
