The sellers push back toward the lows
The USDCAD sellers are making play toward new lows for the year reached earlier this week at 1.20122. A move below would take the price to the lowest level since May 2015, and have traders thinking toward the May 10 low of 1.19224 as the next key target.
The move to the downside has been held up by price action seen over the last few days.
After reaching a low on Tuesday, the price broke back higher helped by support buyers near the low from last week at 1.20447. The range between 1.20447 and 1.20529 was subsequently defined by swing lows and swing highs on May 18 and May 19.
The move higher (on Wednesday) extended toward a swing area going back to May 6 between 1.21299 and 1.21408. The highs for the week on Wednesday and Thursday did trade above that area (to 1.21421 and 1.21437 respectively), but each break failed quickly and the price ultimately rotated back to the downside. Resistance held. Sellers back in control.
Yesterday's break back below the 200 hour moving average (green line) led to more selling momentum, and the pair bottom in the aforementioned 1.20447 to 1.20529 area.
Today, the initial correction higher was able to extend back above its 100 hour moving average and also a swing area between 1.2078 and 1.20832. However, the 200 hour moving average could not be breached and the price rotated lower.
The pair and subsequently moved below the lower swing area (at 1.20447-1.20529), tilting the bias more to the downside. The only thing in the way is the low for the week at 1.20122.
For traders, stay below the 1.20529 level keeps a bears and sellers in play. Move above and sellers might get frustrated into the Friday close and look back toward the 100 hour moving average.
For now, however, the ball is more in the sellers court. The buyers have to prove they can take back control.