Key swing area from last week and earlier today at 1.27125-21
The USDCAD tumbled on the back of better retail sales and CPI data in Canada today. The price fall did have a limit. The low stalled against an area that has been home to a number of swing lows and highs (see red number circles). Yes, the price has traded below that area (see yellow area in the chart below). So a break can happen. However, since it has seen 10 or so swing reactions in that specific area, makes it a level that the "market" will pay attention to on a test (like it did earlier today).
Helping the bears now, is that the corrective move off the low today did stall right before the 200 bar MA on the 4-hour chart above at 1.2777 (the high reached 1.2772 - See earlier post outlining that key level). Sellers took advantage of the bounce and leaned against the broken trend line. That says to me that sellers are more comfortable especially after the better data today.
Can those sellers push below the floor now?
That is the next big test. Move below and the next test will be at the 1.27000 and then the 1.2776 area where a trend line and 50% retracement of the move up from the October 12th low cuts across. Key area for sellers to get below to keep the momentum going.
