It has been more of a brawl

The USDCAD fight started when the trade numbers for Canada came out weaker. The USDCAD spiked higher from 1.3092 to 1.3133. The bullls were in charge but not for long.

The first bearish clue came on the the move below the 38.2 to 50% retracement of that spike higher (between 1.3112 and 1.3117 -see chart above). The fall extended to the Asian session high at 1.3096. A correction off that level was minor and the price tumbled even lower - falling to and through the low for the day and the low from yesterday. The fight intensified with a 43 pips correction higher, followed by a resumption of the downward bias. Action was up and down in quick bursts. Like a bar room brawl.

We have just recently made a new low and traders are a bit bloody from the brawl we have seen today.

Looking at the 5 minute chart above, I would put resistance at the 1.3060 to 1.3068 area. This is the 38.2 to 50% retracement of the last trend leg down. The low from yesterday and Asia-Pacific low today at 1.3063 is between that correction zone as well. If the sellers are to keep control (in a more organized/normal market), this area should hold resistance.

Looking at the daily chart below, the low price from September 18 comes in at the 1.3009 area (let's call it 1.3000). This would be the next downside target.a break below that level, may have traders thinking 1.2951-58 (lows from August 12/ August 13). Further down is the 100 day moving average (blue line in the chart below), 38.2% retracement of the move up from the May low, and the swing low from July 29 at the 1.28687 area . It is a long way off. Oil prices may not allow it - nor the Canadian economic fundamentals - but those are the downside targets if the selling pressure continues - the buyers don't take back control.

On the upside, in addition to getting back above the lows from yesterday/earlier today at 1.30635 area, the high price today failed to remain above the 1.3114 area for long (this was the swing low on Sept 1). In addition the upward sloping trend line was broken yesterday (bearish - it is at 1.3163 currently). A move back above these broken levels will be eyed for more bullish clues. PS The pair is on it's 5th straight down day. Back in June there was a 4 day swing lower, but other than that, we have not seen this type of consistent downside in this pair.

Oil prices have squeezed higher today with WTI crude up about 2% currently but off the highs a bit. This has helped contribute to the beaishness, as has the more bearish dollar today.