The USDCAD has moved lower over the last few hours and approaches the key 200 day MA at 1.0105. A move below this level has the low for July at 1.00995 not far behind. I would look for buyers against this congestion area on the 1st test.
The 100 day MA (blue line in the chart above) at 1.0071 and bottom trend line comes in at 1.0062. So there are a series of support levels in place for the pair, but the most important level will be that 1.0199-1.0206.
If support does hold, traders will be eyeing the 1.01173 area as the 1st upside correction level. This is the close from yesterday. Stay below and the sellers remain firmly in control. I would then expect sellers to push below the key floor.
A larger correction could see the price extend up to the 1.0124 t0 1.01286. This is the 38.2-50% of the move down over the last few hours. The 200 bar MA on the 5 minute chart dissects that area (green line in the chart below).
I am not surprised to see buyers at the 1.0199-06. However, a move below this level should find some further momentum sellers. So be aware.
