Technical Analysis

USDCAD runs higher. Reverses earlier declines and more. Tests high from Friday.

USDCAD runs higher and above 100/200H MAs

Looking at the hourly chart, the price in the Asian session moved sharply to the downside after the open, but found support buyers near the 61.8% retracement of the move up from the November low to the November high. That level came in at 1.3385. It is also near the low of a swing area from November (see green numbered circles). The inability to move below that level gave the dip buyers an opportunity and the battle was started..

It took a second move above the 50% midpoint and the 200 hour moving average (green line) over the last few hours of trading to increase that bullish bias. After breaking above the 100 hour moving average at 1.34716, the buying intensified even more. The price has now moved just above the high price from Friday at 1.35199.

The stronger-than-expected ISM services data was also a catalyst for a higher US dollar.

Later this week (on Wednesday) the Bank of Canada will announce their latest and straight decision with the market split between 25 basis points 50 basis points. That will add to trader anxiety as we get closer to the release (10 AM on Wednesday). The 100 and 200 hour moving averages will be barometers for the bullish or bearish bias. Right now, the buyers are making their play.

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