Swing area between 1.25778 and 1.25962.
The USDCAD is trading back into a key swing area (on the downside).
That area comes in between 1.25778 and 1.25962 (see red numbered circles and yellow area in the chart above).
Recall from last week, the price moved into that area, but found support buyers. On Thursday, the price extended back above its 100 and 200 hour moving averages (blue and green lines) – giving the buyers some hope of further upside potential.
However, Powell’s more dovish speech at Jackson Hole sent the USDCAD pair lower and back below its 100 hour moving average in the process (blue line).
In trading today, the Asian session saw a modest rebound back toward a retest of the broken 100 hour moving average (blue line currently at 1.26269). Sellers leaned against that moving average and pushed lower. The price reentered the lower swing area.
A move below 1.25778 should open the door for further downside.
On a break, the next key target comes in against the 200 day moving average down at 1.25419, IF the price can stay below the swing area.
The key is to get below the swing area and then get to the 200 day moving average for the bears/sellers. Holding support against the swing area still keeps the dip buyers in play but they need to take the price back above the 100 hour moving average to give them more confidence.