The USDCAD fell sharply on Friday after the stronger than expected jobs report. The price moved to – and through – the 1.2700 level to a low price of 1.2693 before rebounding higher into the close. The high corrective price did extend back up toward the 200 hour moving average (green line), but backed off into the close on Friday.
In trading today, the price initially moved lower in the Asian session then moved back above the 200 hour moving average. Sellers turned the buyers on the break above (stops triggered), and pushed the price up toward a upper swing area between 1.27826 and 1.27956 (the topside yellow area where there have been a number of swing highs and lows going back to the end of January).
The high price reached 1.27886 before rotating back to the downside.
The last seven or so trading hours has seen the price trade back below its 200 hour moving average, but price action has been above and below that moving average level with support holding against the 50% midpoint of the month of trading range at 1.27432.
The current price at 1.2754 is trading between the 50% (at 1.2743) and the 200 hour moving average (at 1.27567).
The best case scenario for sellers would be if the price can stay below the 200 hour moving average right here, and then break below the 50% retracement and stay below that moving average. That would open up the door for a rotation back toward the 61.8% retracement at 1.27061, and the natural support at 1.2700.
Conversely, moving back above the 200 hour moving average keeps the up and down volatility intact.
A break above and we could see another rotation back toward the 1.2780 (broken 38.2% retracement). Move above that retracement and the swing area (up to 1.27956) and the 100 hour moving average (blue line) at 1.27991 become the focus.