USDCAD trades to a new low for the week/going back to May. What next technically?
Canada retail sales came in better than expectations today, helping to keep pressure on USDCAD. The pair is trading lower, although it has seen a modest bounce off the session lows.
The broader move this week has been firmly to the downside, with selling accelerating following the U.S. Treasury announcement earlier in the week. Ongoing discussions surrounding the framework for a U.S.-Canada trade agreement have also helped underpin the Canadian dollar.
Technically, USDCAD started the week by moving into a key support area defined by a lower channel trendline and the 200-day moving average near 1.3846. Buyers leaned against that support and pushed the price higher Tuesday and into Wednesday. However, the rebound stalled ahead of the 100-day moving average at 1.39138, while sellers also leaned against last week's midweek low near 1.3908.
That failure proved important.
As U.S. dollar selling intensified following the Treasury announcement, USDCAD tumbled back below the 200-day moving average and the lower channel trendline, increasing the bearish technical bias. The pair subsequently broke below the 61.8% retracement of the move up from the May low at 1.38169, opening the door toward the next key swing area between 1.3765 and 1.3778.
That area was broken yesterday, but the move could not be sustained and the price bounced back higher. Today, however, sellers returned and pushed the pair back below the swing area, with USDCAD reaching a new weekly low at 1.3733.
What next?
The 1.3765–1.3778 swing area is now the key close-risk level for sellers. Staying below keeps the sellers firmly in control and leaves the downside bias intact.
A move back above 1.3778, however, would represent another failed break below that support area and could lead to some disappointment for sellers. That would shift the focus back toward the broken 61.8% retracement at 1.38169. Above that, traders would look toward the underside of the broken channel trendline, currently near 1.3824 and moving lower.
For now, sellers remain in firm control below 1.3765–1.3778.
This article was written by Greg Michalowski at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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