Looks to test its rising 100 hour moving average on the downside
The USDCAD is lower on the day but remains in a narrow trading range of 35 pips. The average over the last 22 trading days has been 70 pips.
Technically, the move to the downside has taken the price back below its 100 day moving average at 1.25424. On Friday, the price closed just above that moving average level. The Asian session high today reach 1.2551 before rotating to the downside.
The fall below the 100 day moving average (blue line currently at 1.25424) has led to a steady but modest decline to the 38.2% retracement of the move up from last week's low. That level comes in at 1.25205. The low for the day has just reached 1.25199 - just below that retracement level (but momentum could not be sustained). The current price is at 1.25264.
The corrective move has also allowed for the price to catch up with the 100 hour moving average at 1.25141 (lower blue line). Move below the 38.2% retracement and the 100 hour moving average would tilt the bias in the short term more to the downside. Sellers would want the moving average to remain broken to keep the bearish bias.
The 50% retracement of the range last week at 1.24948, and the rising 200 hour moving average at 1.24759 would be the next downside target followed by the 200 day moving average at 1.2470.
In contrast, hold support against the 38.2% retracement/100 hour moving average, and buyers remain in play. Traders would look for a re-break of the 100 day moving average at 1.25424 to shift the bias back to the upside, and disappoint the sellers.
Summary: The USDCAD's move below the 100 day moving average is the disappointment for the buyers on the break. However, the pair still remains above the rising 100 hour moving average/38.2% retracement. So buyers and sellers are battling it out to start the trading week and awaiting the next shove either above the 100 day moving average or below the 100 hour moving average.
