USDCAD rebounds off the 50% retracement level
The 50% is 1.2804. The low reached 1.28023
The CAD got a boost at the end of last week (USDCAD lower) on the back of the exemption of the Trump tariff (at least for now). The price of the USDCAD reached the 50% of the move up from the February 23rd low at 1.2804 in the last hour of trading on Friday (the low reached 1.28036). Today, that 50% line was tickled again with a lowest low at 1.28023.
The price moved higher off of that support/midpoint level in the London session, but the gain was limited. The high price has reached 1.28377 today. We currently trade in the middle of the narrow trading range at 1.2821.
It seems logical that the pair stalls near the most recent 50% retracement of the last leg higher. Traders are also stalling near the 1.2800 natural support level. The tariff exemption is good news for the loonie, but their still is more work to be done on NAFTA and the trans-shipping issue that funnels China steel and aluminum through Canada to the US. News on that could weaken the CAD (higher USDCAD) on a stray headline that disappoints.
So pay attention to technical price levels for clues.
We know the support at the 1.2800-04 area. A move below is more bearish and would likely signal more confidence on NAFTA.
On the topside, the 1.2850-60 is the first resistance area. The 200 and 100 hour MAs at 1.2883-87 is the second key resistance area. Those MAs were broken to the downside on the back of exemption news. A move back above would not be good for the bears/sellers.
News that is disappointing for a NAFTA agreement and/or more trade tariffs news, would be a catalyst for potential breaks of those levels on the topside.
Right now, the floor is set but buying - so far - is limited.