Recall from last Friday, the pair moved lower after much stronger than expected jobs data. However the price low stalled ahead of the swing low from March 7 (the low reached 1.26918 on Friday) and rebounded back to the upside.
This week, on Monday and Tuesday the pair continued the move to the upside breaking above its 100 hour moving average on Tuesday and running up toward a swing high area between 1.28649 and. 1.28768. The high price peaked at 1.28706.
On Tuesday the retracement lower began with the price breaking below both the 100 and 200 hour moving averages (blue and green lines). Yesterday after running toward the 100 day moving average (and testing the employment day low from last Friday), the price spiked higher after the FOMC decision, but found willing sellers near the 100/200 hour moving averages and retraced to a new session low into the close.
Today, the price action traded above and below the 100 day moving average at 1.2681 through the Asian session, but started to move away during the European session to the downside. Admittedly there has been up and down price volatility, but the swing high in the early North American session has found sellers against that 100 day moving average (blue line at 1.26811). The pair currently trades at 1.2864.
Going forward if the 100 day moving average can put a ceiling on the price action in the USDCAD, the sellers are more in control.
Downside targets include 1.2645 followed by a swing area between 1.2620 and 1.2626. The 200 day moving average cuts across at 1.26018. The low price from March reached 1.2686 (which was above the 200 day moving average at the time).
Conversely, if the price of the USDCAD moves back above the 100 day moving average, then there would likely be disappointment from the sellers on the break. Move above the employment day low at 1.26918 would further spoil the sellers mood and lead to further upside momentum.