Test of topside trend line keeps a lid on the topside for the pair
The USDCAD has moved to a new session low at 1.3153. The move lower comes after the pair moved back above the 100 hour MA (see blue line on the hourly chart below) but could not extend above a topside trend line (see red circle 4).
The inability to extend above that trendline gave sellers some confidence and the buyers turn to sellers. Although the price traded above and below its 100 hour moving average over the last 4 or 5 hours, the price is now moving away from that moving average level (see blue line). That moving average is now close risk for sellers. Stay below is more bearish. Move above and the intra-day sellers may turn back to buyers.
On the downside,the low from last week at 1.3150 is the next target to get below, and stay below. Yesterday, those levels were broken on the way to a run to the November low price of 1.31147. The low from yesterday reached 1.31144 - a fraction of a pip below the November low (see daily chart below). The inability to extend below that level helped to push the price back to the upside as sellers turned buyers.
Today's price action has so far been confined by the 50% retracement of the move up from the October low at 1.3184 and the 61.8% retracement of the same move at 1.31505. Can the sellers push below the lower and through that 61.8% retracement level? That is what traders will be watching now.
Crude oil prices remain above the $60 level. The low for the day reach $60.03. The high for the day has extended to $60.90. We currently trade at $60.86 up $0.65 or 1.08%. That is helping to strengthen the Canadian dollar.
