In an earlier post, the USDCAD that fallen to a new session low after the higher-than-expected CPI data. The low price extended below the low from April 14 at 1.25200, but saw a bounce back toward the 50% retracement level.
In the earlier post I commented:
"Watch the 50% midpoint (of the same trading range) at 1.25387. Stay below that level would keep the sellers firmly in control."
That 50% retracement level did hold resistance on the corrective move higher, and the price started to move back to the downside as sellers were encouraged and buyers became increasingly nervous.
Further in the post I commented:
"A move below the 61.8% retracement at 1.25065 would have traders targeting 1.2479 area. A swing low from April 6 came in near that level. There also other lows from April 1, and April 4 around that level."
The price low has since reached 1.24807 (see red numbered circles in the chart above). There has been a modest bounce up to a 1.2495.
What now ?
Like the 50% retracement, the 61.8% retracement 1.25065 will now be eyed as resistance. Stay below and the sellers remain in firm control. A move below 1.24798 would have traders targeting 1.2463.
What may give traders some cause for pause, is at the current support the trading range for the day is now up to 143 pips. The average over the last 22 trading days (around the month of trading) is 80 pips. So at 143 pips that is 179% of what is normal. The market may take a breather against the support level, with stops on a break below.