Looking for a break and run
The USDCAD trended lower last week and reached new low yesterday (by about 8 pips) and again today (by about 2 pips more). That break and move is not what you really want/expect. The pair has rebounded higher.
The move to the upside in the North American session has seen the price move from 1.30986 to 1.31465.
That takes the range today to 47-48 pips. That is also the range for the short week so far (yesterday's range was only 42 pips and between the low and high today). Something has to give. Traders are waiting for the next shove.
The pair trades near the highs. The sellers had their shot yesterday and again today with the new lows. Each failed. Is it time for the buyers to make a play?
If so, a move to new highs would have traders looking toward a minor target at 1.31608, followed by the falling 100 hour MA at 1.31716 (blue line).
The price was last above the 100 hour MA on October 7 and stayed below (at 1.3287 area). That led to the near 200 pips move lower over the following 3 days.
Now if the price can break higher and get above that falling MA and the 38.2% at 1.31907 it would open up the upside for more probing. Remember though that if the buying and buyers are to be taken with any seriousness, getting and staying above the 38.2% of the last move lower (from the October 7 high) is the bare minimum. Absent that and the move is simply a correction in a more bearish market.
For now, first thing first. That is to get above the high for the day at 1.31465 and move toward the 100 hour MA next.
Failure to take the first step, however, (above 1.31465), is not a first step. Something still has to give….