The USDCAD moved up to a downward sloping trendline yesterday near 1.2858 (the high price reached 1.28533), and found willing sellers on the first look (see post here). That trendline came ahead of a higher swing area between 1.28709 and 1.2900 (a nice round number).
The sellers held the trendline and the price rotated down closing at 1.28154.
Today the price has chopped up and down but did reach a new month high and highest level since March 9 at 1.2879. That move higher took the USDCAD price above the trendline and also into the higher swing area. However sellers over the last four hours have pushed the price back down. The low price reached 1.28243 off of the high.
Thing on the daily chart, there is a another swing area that confined the range going back to January and most of February. That area comes between 1.2783 and 1.28132. The low price today in the USDCAD reached 1.2797, between those levels. A move below going forward would increase the bearish bias.
Overall, given the up and down price action in the USDCAD going back to July 2021, one has to respect the extremes.
Today the high did enter a swing area that is the final stopping target swing area (see red numbered circles) ahead of the extreme highs going back to December 2020 (green circles in the chart above). The swing high has seen sellers on 8 other tests (see red numbered circles). There is a reason to sell there.
Does it now lead to a rotation back down (USD selling)?
Traders will watch the 1.2783 to 1.2813 area now for the downside clues. Get below, and Pavlov's bell rings and buyers turn to sellers (back down to the 100 day MA?).
Hold that swing area, and the buyers might take the next steps above 1.2900 toward the extreme high at 1.29631..
