Forex technical analysis: USDCAD stays below 100 hour MA

Technical Analysis

Author: Greg Michalowski | usdcad

Price has not been above MA this week...

The USDCAD moved below the 100 hour MA (and 200 hour MA) a week ago after better than expected CAD employment data. 

This week, the BOC Wilkins was more bearish in comments on Monday and Poloz followed up with similar sentiments on Tuesday.  The momentum continued into Wednesday. 

Yesterday was a correction day as lower oil prices helped to give a corrective boost. However, the rally stalled right at the 100 hour MA and 38.2% of the move down from the June 9th high at 1.3305 area.   The price has wandered lower today - keeping under the declining 100 hour MA (blue line at 1.3263).

We are currently testing that MA line at 1.3264. The price has not traded above that MA since the break last week. The MA is of course much lower today (was at 1.3483 when it broke below a week ago), but traders will use it to help define risk and bias.  Stay below keeps the bears in control. Move above and the sellers might look to take profit before the end of the week.

It is decision time for the traders.....The trend is lower. The sellers remain in control.  Can they keep the technical bearish control? So far. So good.

PS the CFTC commitment of traders report last week showed that CAD shorts were still near record levels.   With the CAD going higher this week, it will be interesting to see if the shorts were squeezed out of the position. The report will be released around 3:30 PM ET/1930 GMT.