Whereas, currency pairs like the EURUSD and the GBPUSD has had its share of of ups and downs this week, the USDCAD has been trending more to the upside. The pairs is up 5 of the last 6 trading days after bottoming on Friday at 1.32996 (call at 1.3300). The high price reached 1.35627 today for a move of 263 pips in about 5 1/2 trading days.
Technically, the move to the upside had seen the price extend back above a number of key technical levels including:
- 100 hour moving average (smooth line in the chart above) currently at 1.34396,
- 200 hour moving average (smooth green line) currently at 1.34207
- 200 day moving average currently at 1.3496 (step green line)
- 100 day moving average currently at 1.35260 (step blue line)
- The 38.2% retracement of the move down from the March 24 high was also broken at 1.34922
The high price today stalled within a swing area defined by swing lows and swing highs from March 29, March 30, and March 31 and again on April 10 between 1.3553 and 1.35638. The price also stalled near the 50% midpoint of the same move down from the March 24 high. That level comes in at 1.35518. That swing area is key for the pair going forward. Move above and more upside probing can be anticipated with the 61.8% retracement near 1.3611 as the next target level/area.
Conversely, stay below and move back below the 100 day moving average at 1.3526 would likely lead to a shifting back to the downside - at least in the short term - with the 38.2% retracement at 1.3492 and a swing area between 1.3480 and 1.34886 as the next target.
The buyers have been in charge this week for the pair and trading back above the 100 day MA is good news for the buyers, but there is a tough risk area above that is giving traders a low risk sell area to take some profit, and maybe even sell against (with stops on a break higher)
PS Lower oil prices help to contribute to the decline in the CAD. The price of crude oil has fallen $5.80 or 5.45%. The low price today tested the 100 day MA and bounced. That may also help slow the USDCADs move higher.