USDCAD corrects lower, but finds support. What future for the currency pair?

USDCAD corrects old swing zone


Read this term has been on an uptrend with the pair up 6 of the last 8 trading days (with modest declines on the 2 day lows). The price moved from a low on September 13 to 1.2953. The high price hit 1.3543 today for a gain of 590 pips over 8 trading days. On Tuesday this week, price moved and closed above its 50% midpoint of the range since the 2020 high (see daily chart above). This level came in at 1.33364. Moving above this level tilted the long-term bias more to the upside. The price also extended above an upper trendline earlier in the week. Bullish.

Yesterday the pair moved above a swing zone between 1.3389 and 1.34194, returning to swing highs in August, September and October 2020. Another bullish target has been removed.

Looking at the daily chart, the price hit a high of 1.35430 before reversing lower and erasing the day’s gains. However, when the price re-entered the aforementioned swing zone between 1.3389 and 1.34194, the bearish buyers entered and have since pushed the price higher. The current price is trading around the 1.3500 level.

Going forward, we would need to break below the 1.3389 level to give the sellers more comfort now that this support level has held on the downside (the importance of the levels is increasing). The 50% midpoint at 1.33364 is another key level that should be broken – and stay broken – for sellers to regain more control of what is an uptrend.

Analyzing the hourly chart below, today’s corrective move down saw price retest an ascending trend line and the correction zone between the 38.2% retracement to the 50% retracement of the last trend increased between 1.3385 and 1.34225). approximately) weekly chart support between 1.3389 and 1.34194, again increasing the importance of the zones.

The rising 100-hour moving average is still a long way off at 1.33475. Going below this moving average would add to the downside bias. Until then, the buyers/remain in control in the medium/long term.

Note that on Tuesday the price found support against this 100 hourly moving average before starting the next uptrend leg from 1.32262, today’s high price of 1.35437 (317 pips over the 3 trading days – see hourly chart below). This too is an indication of the uptrend of the market.

USDCAD returns to support and rebounds


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