Double bottom at 1.26874
The USDCAD bottomed on Tuesday at 1.26874. The pair moved higher yesterday helped by the initial spike higher after the FOMC rate decision and lack of change in the maturity structure of the Fed bond buying. However, as stocks rebounded, the USD started to fall once again.
Today, the Asian session started with the price just below its 100 hour moving average (blue line in the chart above). Apart from a few peeks above the line in the early hours, the price has remain below that level today, and started to move back down on the inability to extend higher.
The subsequent move to the downside at its limits. The price decline stalled right at the low from Tuesday at 1.26874. The "double bottom" (see red numbered circles) was enough to turn to sellers to buyers. The last few hours has seen the price wander back to the upside.
The high price so far has reached 1.2734. That was near the closing low levels from yesterday's trade. The pair is also re-approaching the 100 hour moving average currently at 1.2740 (and moving lower). A move above would tilt the bias more to the upside.
Having said that, getting above the 100 hour moving average is not unique since December 9. The price of the pair moved above the moving average level on December 9, December 10, December 11, December 14, December 15 (briefly) and again yesterday. However, apart from the spike higher yesterday after the FOMC, the price has not been able to extend to the 200 hour MA (green line). That is more unique.
Technically speaking, if going forward, the USDCAD is to build off the double bottom, then getting and staying above the 100 hour moving average is the minimum requirement.
The next target would would then look toward the 200 hour moving average currently at 1.2762.
Until those two things can happen, the buyers are not really winning. They may be neutralizing the market a bit, but they are not winning.
