USDCAD moves higher into 200 day MA resistance. Key barometer for buyers and sellers
The USDCAD has moved higher after trade talks between the U.S. and Canada broke down. This morning, USTR Greer said the U.S. offered Canada significant concessions in the latest negotiations, but Canada continued to seek more, contributing to the breakdown in talks. Greer downplayed the broader economic impact, saying the latest tariff measures affect only a small portion of overall U.S.-Canada trade. He also said political considerations played a role in Canada's negotiating stance and reiterated that the U.S. trade deficit with Canada remains an issue for the administration. On the broader U.S. economy, Greer said the fundamentals remain solid and the economy is on a good trajectory.
That is the fundamental storyline. The technical storyline has seen USDCAD rebound sharply, reflecting a weaker Canadian dollar as traders refocus on the implications of deteriorating trade relations with the U.S. Although both economies would likely feel the effects of a prolonged dispute, the market reaction has initially been more negative for the CAD.
The rebound also comes after a more bearish run in USDCAD since the pair peaked in June. Last week, the price broke below its 200-day moving average near 1.3846 for the first time since late May, increasing the bearish momentum. The decline eventually bottomed Friday at 1.37317, near swing lows from mid-May and just ahead of another swing area between 1.37089 and 1.3715.
Today's move higher reversed some of that technical damage. The price moved back above a broken trendline and the 61.8% retracement at 1.38169 before extending toward the key 200-day moving average near 1.3846. The high reached 1.3850, but buyers have so far been unable to sustain momentum above the moving average. The price has since backed off to around 1.3834 as sellers lean against that key resistance.
Going forward, the 200-day moving average is the key barometer for buyers and sellers.
On the downside, a move back below the broken trendline and 61.8% retracement near 1.38169 would give sellers added confidence. Below that, the swing area between 1.37655 and 1.3778 would become the next downside target.
Conversely, if USDCAD can get and stay above the 200-day moving average, buyers would take back more control. The next upside targets would come near 1.3877, followed by the 50% midpoint at 1.3899 and the 100-day moving average at 1.39132.
For now, the 200-day moving average has done its job as resistance, with sellers leaning against the level. Stay below and the bias remains more bearish. Get and stay above, and the buyers start to take back more control.
This article was written by Greg Michalowski at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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