The USDCAD fell sharply on Friday on the back of the much better than expected jobs report. The number of jobs added was 150K which was well above the 15k expected. The prior month was revised lower to 69K from 104K previously reported, but with a two month gain of 219k, the job data is solid.
The move lower on Friday saw the price move below the 200 hour MA and stay below. Today, the rally higher in the Asian session stalled at the 200 hour MA and rotated lower.
So sellers are in control below that MA level and with sellers leaning on Friday and again today, it increases the levels importance going forward.
On the downside, the price moved below a swing area between 1.3339 and 1.3358 (see red numbered circles). That area was broken on two separate tries today. Each failed.
The low today reached 1.3324. That was short of a swing low going back to January 13 at 1.33206.
What next?
Sellers had their shot. They missed. The buyers against the 1.3339 level now, will need to see a move above 1.3358 (and stay above), followed by the 50% midpoint of the February trading range at 1.3368 to have traders looking once again toward the 200 hour MA at 1.33836.
Conversely if the 1.3339 level is broken again, maybe the third time is the charm today?
Overall however, looking at the hourly chart, the pair is mired in an up and down trading range with plenty of volatility. Yes, fundamentally the jobs report is a concern and the price is down as a result, but the BOC announced a "conditional pause" back on January 25th which seems to be putting a limit on the downside.
So watch the 200 hour MA for the next clue to the bias. Stay below keeps the downside alive. Move above, and the downward bias strength eases a bit.
