200 hour MA at 1.24185
The USDCAD traded to its highest level since October 12 yesterday and in the process moved above its 200 day moving average at 1.24729. The 38.2% retracement of the move down from the September 28 high also came in near that level. The high price reached 1.2485, but ran out of steam and quickly move back below those technical levels. Failed break. Buyers turned back to sellers.
The pair has chopped lower with the price today moving below the 200 hour moving average in the early European session. However there was a spike back higher after the CPI data that took the price back above its 100 hour moving average 1.24446. Once again, the technical break failed and the price has subsequently moved back lower.
More recently, the pair has also moved below its 200 hour moving average (green line) at 1.24185 on its way to a new low for the day at 1.23858.
What next?
Looking back to last Wednesday and Thursday, the the pair held against the 200 hour moving average on each of those trading days. As a result, moving back below that moving average is a bearish play.
Sellers looking for more downside momentum could use that level as a close risk defining level now. Stay below is more bearish.
On the downside, the swing lows from last Wednesday and Thursday one the price last tested the 200 hour moving average, comes in near 1.23762. That level becomes the next key downside target. Falling below that swing low would increase the bearish bias and have traders looking down toward the 1.2350 area.
