USDCAD cannot extend above the 100 day moving average target. Sellers push the price lower.
The USDCAD is moving lower today, but remains confined between key moving averages as buyers and sellers battle for control.
Recall from last Friday, that the pair found support near the converged 200-hour and 200-day moving averages (green lines on the chart above) ahead of Fed Chair Kevin Warsh’s more hawkish speech at Jackson Hole. The subsequent rise in US yields helped send the US dollar sharply higher and the USDCAD up..
That rally carried USDCAD from the lower moving-average support cluster toward its 100-day moving average. In early trading today, the price extended to a new high of 1.3911—about four pips short of the 100-day moving average near 1.3915.
Sellers leaned against that key technical level and pushed the pair back to the downside. Just as buyers entered near the 200-day moving average last week, sellers have now entered against the 100-day moving average.
The decline has brought the price back into a cluster of support between 1.3867 and 1.3882. That area includes:
- A swing area
- The rising 100-hour moving average near 1.3868
- The 38.2% retracement at 1.3882
If buyers hold that cluster and push the price higher, the 100-day moving average near 1.3915 will remain the key upside target. Getting above and staying above that level would give buyers greater control and open the door for additional upside momentum.
Conversely, a sustained break below the 100-hour moving average would weaken the short-term technical picture and shift the market’s focus back toward the converged 200-hour and 200-day moving averages near 1.3848.
For now, USDCAD remains caught between moving-average resistance above and moving-average support below. The next break should help determine whether buyers or sellers take greater control.
This article was written by Greg Michalowski at investinglive.com.