USDCAD tests 38.2% Fibonacci support at the 1.01977 level.

Yesterday the price of the USDCAD moved sharply higher but it could not sustain the price above the 200 hour MA/above the 61.8% of the recent move down. In a comment yesterday (see prior post) I spoke to this problem.

The traders did get frustrated with the lack of upside momentum and the price did fall below the 100 hour MA (blue line). A sustained move lower was started.

The price decline has nearly erased the gains from yesterday. Traders have found a reason to take some profit, however, against the 38.2% of the move up from the end of April low. That level comes in at 1.01977 (see daily chart below). Yesterday, the price dipped below this level after the weekend events but could not sustain the bias. Today, that level increases in significance. A break under the 1.01977 will need another push below low for the week at the 1.0190 level (see chart below). However, if done, expect continued downside momentum in the pair. The current support at the 38.2%, would then become resistance at the 1.0202 level.

Look for resistance at the 1.0218 level this morning. This is the 38.2% of the move down today and also lows from earlier today (see chart below). If the price stays below this level, the bears remain in firm control.