The USDCAD has been trading in an up-and-down trading range mostly between 1.3344 and 1.3454 (110 pips).
There was an extreme low reached on Friday's trade down to 1.33204, but that was quickly reversed. The swing area between 1.3344 and 1.3358 was reestablished on Monday and again today at the session lows. Going forward, that swing area floor would be needed to be broken to increase the bearish bias.
The move back to the upside has seen the price extend above the 100 and 200 hour moving averages (blue and green lines). Yesterday, the price moved above the 200 hour moving average only to find willing sellers against a swing area between 1.34368 and 1.3444. The price quickly moved back below that moving average line and reestablish the moving average as resistance.
The move back above the declining 200 hour moving average today once again tests the buyers conviction. The difference today is the hurdle is an easier hurdle to get to and through given the declining moving average level (see green line). There is also room up to the higher swing area, that gives buyers some added room for profit before reaching the next resistance targets.
Nevertheless buyers need to show that they could stay above the 200 hour moving average, and tilt the bias more to the upside.
Buyers are taking a shot. Can they keep control and increase the upside momentum toward the upper target levels?
The Bank of Canada will meet next week and there is uncertainty if they raise rates by 25 basis points. The BOC Survey on Monday showed declines that are worrisome. The consumer is also feeling pressure from the sharp rise in mortgage rates that are sapping spending power.
On the otherhand, the employment numbers at the start of the month were strong (104K and most full time workers). Its good to have a job, but the expectations of a recession still loom.
