Forex technical analysis: USDCAD more bearish with support ahead....
Rally yesterday stalls at 200 hour MA
The price action this week in the USDCAD showed a quick move lower on Monday, and more up and down action since that time.
The pair did find support near the 38.2% of the move up from the April 13th low at 1.35748 on Tuesday-Thursday. The rally off that support yesterday, saw the price move through the 100 hour MA (blue line) and up to the 200 hour MA AND 100 bar MA on the 4-hour chart at 1.3669 level. That level held, the price moved back below the 100 hour MA, and has since stayed below that 100 hour MA line The failure to break the MAs and the holding below the 100 hour MA yesterday afternoon, gave the sellers to go ahead to probe lower.
Today, we have moved above and below that 38.2% level at 1.35748, but the bias is more negative. We are currently trading below that old support level. Stay below is more bearish.
ON the downside (and at the low), traders leaned against a lower trend line that connects lows from May 8 and May 16 (see red circles in the chart above). That line cuts across at 1.3547 currently (and moving lower). The 200 bar MA on the 4-hour chart is at 1.3539 currently (and moving higher). Those levels are support targets on a test. Look for traders to lean against the area with stops below 1.3539.
Bears are in control but key support looms. A break and the 1.3500-07 (50%) are the next targets. ON the topside, get above 1.35748 is close upside resistance. Above that, the 100 hour MA is key (at 1.36118 now) for more upside potential.
PS oil is helping to support the CAD today (see Adam's post here).