Earlier today I posted on the USDCAD (see “The USDCAD retraces back to the 100/200 hour MA. This is the place to buy if you like the upside“), that the 100 and 200 hour MA were being tested at 1.2702 and that:
“If it is time to buy, it would be against those two MAs (with stops on more momentum below the MAs).”
I added,
“Get back above 1.2725 would give the dip buyers more confidence intraday as the markets find their way at the start of the trading week”.
The MAs did stall the fall and the subsequent rise took the price to 1.2727 – just above the 1.2725 level. However, momentum did not develop and the buyers turned to sellers.
The price moved back to the downside and cracked below the MA levels the next time. The price has continued lowered, breaking below the trend line and more recently reaching the 38.2% at 1.26628 and a swing area between 1.2649 to 1.26566. The low just printed 1.2657 and bounced higher.
What now?
The swing area is home to a number of swing highs and lows going back to January 24. Like the converged 100/200 hour MAs, buyers and sellers have another decision. Hold the level and the move lower is a standard correction to the 38.2% retracement area and a key swing area. The price can base and go higher.
Break below, and all upside bet are off. The 50% and 100 day MA near 1.26217 become the next targets on the downside and the bias shifts more to the downside. .
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