The USDCAD sellers took the price lower today and in the process fell back below the 200 hour moving average (greenline). The price fell to a swing area between 1.36579 and 1.3665, and below a upward sloping trendline (see blue numbered circles). The price did hold support against 50% midpoint of the move up from the February 20 low near the 1.3650 area.
The price has bounced higher and currently trades at 1.36783.
The sellers had their shot. They missed. As a result, sellers have turned back to buyers.
On the top side, the 200 hour moving average will be re-targeted. That level comes in at 1.37065. That level is also near a swing low from yesterday's trade in the early Asian session. Get above that level and it would increase the bullish bias.
The two year yield is up to 4.334%. That is up over 30 basis points on the day. There is room to roam to the upside given the sharp decline seen from the highs last week neared 5.085%.
Looking at the Fed rate outlook, the market is now pricing a terminal rate of 4.96%. That is less than the 5.11% expected from the Fed at the December meeting (and well off the high levels seen last week which were approaching a terminal target near 5.75%). The expectations are for the end of the year now is for the rate to decline to 4.46%. That's a big shift in a matter of days.
With the huge moves seen over the last three or so trading days and eight days away from the Fed rate decision there is a lot of room for additional volatility.
What we do know for the USDCAD is it would take move below 1.3650 to increase the bearish bias. On the top side, the 200 hour MA will be the upside barometer at 1.37065.
