The 1.2422 area was swing lows from July 7, July 14 and July 30. Have not been there since.
Back on July 6th, the USDCAD broke higher only to retrace to 1.24215 on July 7th.That level was later retested on July 14 and again on July 30th and each time the price bounced. That was the last time that level was tested.
Fast forward to this week, yesterday the low reached 1.2433. Today the low reached 1.24296. Early buyers are leaning against the old floor and stalling the fall. A move below is now needed to open the door for further selling. Conversely, there may be buyers against the level as risk can be defined and limited against the key floor.
What would give buyers more confidence?
On the topside, the 100 day moving average currently comes in at 1.24913. That moving average is also between a swing area between 1.2488 and 1.2500. That swing area was the subsequent low floor after the break higher back on July 30 (see red numbered circles 1-5).
Last week the price fell below that swing area and this week, the corrective high stalled within its boundaries.
In summary, buyers have reason to lean against the 1.2422 level. It was a key floor and remains a key for on the retest.
However there is also good resistance above against its 100 day moving average and a swing area 21.2500.
The pair currently trade at 1.2444 which is still nearer the low floor.
Is there any additional clues from the hourly chart?
Looking at the the hourly chart below, the falling 100 hour moving averages his currently at 1.2481 (and moving lower). Going forward that moving average will be the closest barometer for the dip buyers to attach additional upside hope. Get above it and then the 100 day moving average and the high of the swing area, would be the progressive bullish steps if a bottom is in place.