Price continues to hold above the 200-hour moving average
Oil prices may be rallying to session highs but it is doing little to move the loonie on the day so far. USD/CAD is virtually unchanged on the day and has been trading in a subdued range throughout the session so far.
Sellers attempted a move below the 200-hour MA (blue line) earlier but that ultimately failed as the low touched 1.3074 before bouncing back higher. The highs remain capped at the 61.8 retracement level just above the 1.3100 handle where offers lie as well.
For now, the near-term bullish bias remains bullish as price stays above both key hourly moving averages but the upside looks rather limited from here. With NAFTA talks continuing to show optimistic signs - at least in terms of headlines - it's helping to keep the loonie buoyed in recent times.
Here's a look at the daily chart:
Despite buyers defending the 100-day MA (red line) on multiple occasions, the downwards sloping trendline from June tells the story for the pair. We're seeing lower highs being formed as the momentum begins to favour sellers - which is why the 100-day MA is being tested as well.
NAFTA talks is the biggest driver for the loonie at the moment so a lot of the price swings will rely on that. While the technical bias favours buyers for the moment, the lower highs pattern suggest that sellers are poised to try and break that stranglehold.
For sellers, the first step would be to move below the two key hourly moving averages but ultimately the key break will be that 100-day MA just under 1.3000. As for buyers, the downwards sloping trendline will be the key level to break above in order to build further conviction to break higher again.
Support
- 1.3078 (200-hour MA)
- 1.3055-60 (38.2 retracement level on H1, swing region)
- 1.3031 (23.6 retracement level on H1)
- 1.2990-00 (100-day MA, bids)
Resistance
- 1.3100 (offers, 61.8 retracement level on H1)
- 1.3130-32 (76.4 retracement level on H1, 61.8 retracement level on D1, downwards trendline)
- 1.3175-80 (August highs)
- 1.3200 (swing region)
