The good news for the buyers/bulls is the USDCAD rebounded after falling below the 38.2% retracement of the move up from the end of April low. That level came in today at the 1.01977 level. The low came in at 1.01903. On the hourly chart, the price at the lows, was also breaking below channel trend line support (see chart below). That also was a bearish move which should have led to lower levels. It did not. FAILURE. Failures on hourly and daily charts at the same time is not good. So the rally started.
The bad news for the bulls/buyers is the market has recently found some selling pressure in the area by the 200 hour MA and 61.8% retracement (1.02726) of the move down from the June 12th high (last week high – see chart below). In fact, the price has tried to push above this area on 3 separate hourly bars, only to be rejected 3 straight times. Needless to say, the buyers and sellers seem to be more balanced at the level.
With the price currently above the 100 hour MA (blue line in the chart below at 1.0252), I have to give the bullish/bearish nod to the longs (stop below the 1.0252 or 1.2041 if more bullish and want to hold on longer). However, I will be looking for a breach and close above that 200 hour MA/61.8% line at 1.0267/726, to confirm the move. A failure to get above this level or a failure on another move above, should switch the buyers to sellers as they become frustrated with the failures.
