Back below MA and 50% retracement
Yesterday, I warned that a break of the 50% retracement of the move down from the July 13th high should not be ignored. The level came in at 1.25919.
Earlier today, the price did in fact break above the 50% retracement line and also the 100 bar MA on the 4-hour chart at the 1.2593 level (they were within 2 pips of each other). The move above gave a more bullish bias. The price extended to a high of 1.26179.
The corrective move tried to hold support near the MA line and the 50% level but the USD weakness, has pushed the price back below the level. We are now looking to retest the 1.25498 level (see chart above). A move below that opens the door for a potential fall back to the 100 and 200 hour MA (blue and green lines in the chart below). Holding and we waffle.
The market action in other currency pairs has slowed down a bit. The USDJPY is above and below the 110.00 level but remains below the 111.23 risk level. The EURUSD is trying to hang above the 1.1876 level. The GBPUSD is seeing some corrective action after the steep fall. So the pair may just stall as well and trade the 1.2550 to 1.25919 range. Be aware. Nevertheless, the 50% above reestablishes as a resistance level on the failed attempt to break higher.
PS. Crude oil is up about $0.25 in trading today but has been able to stay below the $50 level (high reached $49.96). We currently trade at $49.82. A break above the $50 level may strengthen the CAD (lower USDCAD).