The USDCAD finally fell yesterday after nine straight days to the upside. That move higher took the price from 1.34198 to a high yesterday of 1.38378 (418 pips in nine trading days).
The price low yesterday reached 1.3769, which was just short of the rising 100-hour moving average. In trading today, however, the price has now broken below that rising 100-hour moving average currently at 1.3778.
In the short term, that tilts the bias more to the downside. Staying below the level would give sellers some control in what has been a buyer-dominated trend move. Traders could use that level/area as a stop-defining level.
Stay below and more downside probing can be expected. Move back above, and my advice is don't mess with the trend.
On the downside, there is a swing area between 1.3753 and 1.37647. Below that and the broken 61.8% retracement of the move down from the August high today September low comes in at 1.37445. Breaking below it and it gives the sellers little more control.
Fundamentally, the expectations are that the Bank of Canada continues to ease from restrictive policy as inflation has declined.
However, the jobs report released last Friday was stronger than expectations which kind of through a monkeywrench into a slower growth story.
The low price on that jobs day reached 1.37247 before bouncing higher. That level will also be a target on further downside should the price be able to stay below its 100-hour moving average.
