The US dollar to Canadian dollar currency pair seesawed as market participants anticipated crucial US consumer price index (CPI) figures coming up, with a range of indicators providing uncertain guidance.
The USDCAD went to a new bottom for the past 6 weeks today, which brought it to a point below Monday’s low of 1.3352 and the 50% midpoint of the 5 month trading range. This midpoint stands at 1.3352, while Monday’s low was at 1.33563. The lowest it went today was 1.3344 and the present price is at 1.33557.
Keeping the sellers in the game is an issue that may cause concern for them in the future. To be effective, the price needs to dip below the midpoint and remain there in order to reach the rising trend line and the region between 1.3207 to 1.32299. Additionally, the 61.8% retracement of the surge up from August’s low is also located in that area.
On the daily chart, it is noted that the cost of last Friday’s close was below the 100 day MA for the first time since the middle of August (illustrated by the blue line in the chart). This shift was due to the surpassing of expectations in the Canada job data, with 104K new jobs and an unemployment rate of 5.0%.
This week’s corrective high rose to a peak of 1.3454 today, then decreased. The 100 day MA is still climbing and is currently at 1.3483, getting nearer to the 38.2% of the move up from the August low of 1.34995. If the rate goes over the 100 day MA, the sellers would give up hope for a downward shift. Additionally, there is a swing area close to the 100 day MA (notice the red numbered circles) and the shattered 38.2% is also nearby that area.
Negatively, if the momentum slips beneath the halfway retracement mark, it will strengthen the bearish outlook. In that case, traders will shift their focus towards the 1.3204 to 1.32299 swing area and 61.8% retracement, which is expected to be a reliable base of support.
The current cost is staying in the range of the upper resistance and lower support, close to the 50% midpoint, as it awaits the next push.