The USDCAD buyers are making a play today.
Here are the technical reasons:
- The price low yesterday stalled ahead of the price low from Wednesday. The low reached 1.2452. The low from Wednesday’s trade reached 1.24476. Moreover the low from yesterday was near the low from January 13. So overall there were three lows within about five pips of each other over the last six or so days. Floor established.
- The price moved above the 200 day moving average and 100 hour moving averages in the early Asian session. The 200 day moving average comes in at 1.2498 the 100 hour moving average comes in at 1.25054
- The price also has moved above its 200 hour moving average 1.25173
- The price is now above a swing area between 1.25257 and 1.25354
Those levels are all fairly scrunched together but the current price currently trading at 1.2544 is above all those levels. Staying above would give the buyers more control have traders looking toward other upside targets including the high from Tuesday at 1.2563, the high from last Friday at 1.2570 and the high from last Wednesday at 1.2577. The 38.2% retracement of the move down from the January high comes in at 1.25871 and would be another target eyed by buyers if the momentum can continue.
Having supported the buyers/buying from a technical perspective, the overall trend since the mid-December high has been to the downside. As a result if the prices started to take back the aforementioned broken levels, all bets are off for further upside potential. In addition, if the price has trouble getting through topside targets like the recent highs going back to January 12, the price could easily reversed back to the downside. The price has not exactly move that far off the lows, although there are some positive/bullish developments.