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Home ANALYSIS

USDCAD retesting its 100H MA for the 2nd time today. A move above would target 200H MA

A.R Chowdhury by A.R Chowdhury
March 29, 2022
Reading Time: 4 mins read
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USDCAD

USDCAD stuck between floor below and 100H MA above

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The  USDCAD 
USD/CAD

The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh most traded currency. The United States and Canada are geographical neighbors, and as a result there is a lot of trade between the two countries. Thus, there is often decent volatility and low spreads for the USD/CAD, typically between 1 and 3 pips on most foreign exchange brokers. Factors Influencing the USD/CADThere are a number of important economic or news releases that can affect the USD/CAD. This includes among others, Non-Farm Payroll data for the US that are released on the first Friday of each month. Such metrics tell us whether employment is rising or falling, while the Gross Domestic Product (GDP) for Canada or the US, measure the total value of all goods and services produced by the country. In addition, the USD/CAD is known as a “Commodity Pair”, as Canada possesses large amounts of natural resources, specifically oil, which is its most traded commodity. As a result, it’s important for long term speculators of USD/CAD to keep a close eye on crude oil developments due to the strong negative correlation.

The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh most traded currency. The United States and Canada are geographical neighbors, and as a result there is a lot of trade between the two countries. Thus, there is often decent volatility and low spreads for the USD/CAD, typically between 1 and 3 pips on most foreign exchange brokers. Factors Influencing the USD/CADThere are a number of important economic or news releases that can affect the USD/CAD. This includes among others, Non-Farm Payroll data for the US that are released on the first Friday of each month. Such metrics tell us whether employment is rising or falling, while the Gross Domestic Product (GDP) for Canada or the US, measure the total value of all goods and services produced by the country. In addition, the USD/CAD is known as a “Commodity Pair”, as Canada possesses large amounts of natural resources, specifically oil, which is its most traded commodity. As a result, it’s important for long term speculators of USD/CAD to keep a close eye on crude oil developments due to the strong negative correlation.
Read this Term
yesterday moved above it’s 100 hour MA (blue line). That was the first break of the MA since March 15. The price break saw the pair move up to the next key MA level at the 200 hour MA (green line). That MA did hold resistance and buyers turned back to sellers.

The subsequent move lower saw the price move back down to test the cycle lows from last week at 1.24646, but found support buyers. Since then, the price rise has seen a move back toward the falling 100hour MA (blue line) currently at 1.25275. That MA has now been tested twice – including the current hourly bar – and each time found sellers (so far).

A move above would once again have traders looking toward the 200 hour MA at 1.2565 (and moving lower).

The dynamics technically are the MAs have caught up to the price and in a way force the “market” to make a decision. Stay below and ultimately move lower, or move above, and tilt the technical bias more to the upside. The run higher yesterday took a step above the 100 hour MA, but failed at the 200 hour MA. Today, the 100 hour MA is trying to hold resistance. However, there is also support at recent lows.

The battle is on. The lines have been drawn in the sand. It is up to the buyers or sellers on who wins the battle.. Traders will be looking for a break with momentum on the break.

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A.R Chowdhury

A.R Chowdhury

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