The 1.2422 area was July 7, July 14 and July 30 lows. I haven’t been there since.
Returning on July 6, USDCAD broke higher to return to 1.24215 on July 7. This level was then retested on July 14 and again on July 30 and whenever the price rebounded. It was the last time this level was tested.
Fast forward to this week yesterday the low hit 1.2433. Today’s low hit 1.24296. The first buyers lean against the old floor and delay the fall. A move below is now needed to open the door to further sales. Conversely, there may be buyers against the level as the risk can be defined and limited from the key floor.
What would give buyers more confidence?
On the upside, the 100-day moving average currently stands at 1.24913. This moving average is also between a swing zone between 1.2488 and 1.2500. This swing zone was the next low floor after the higher breakout on July 30 (see red circles numbered 1-5).
Last week the price fell below this swing zone and this week the corrective high got stuck within its limits.
In summary, buyers have reason to look into the 1.2422 level. It was a key floor and remains a key for the new test.
However, there is also good resistance above its 100 day moving average and a 21.2500 swing zone.
The pair is currently trading at 1.2444 which is even closer to the low floor.
Are there any additional clues in the hourly chart?
Looking at the hourly chart below, the falling 100 hour moving average is currently at 1.2481 (and going down). Going forward, this moving average will be the closest barometer for falling buyers to attach further upside hope. Go above, then the 100 day moving average and the swing zone high, would be the gradual bullish steps if a bottom is in place.
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