This time the break leads to new buyers
The 100 day MA in the USDCAD was tested on two separate occasions earlier today and each time, sellers emerged. Admittedly, the selling could only move the price down above 30 pips to support at the 1.2900 level as outlined in a prior post. That level corresponded with prior low/high. The move above today started to find buyers against the level.
Now with the break and move above the 100 day MA, the buyers are taking control. The 1.2981 is the next target. It is the 50% of the move down from the August high.
The move higher supports a trade of the week recommendation by Barclays who earlier today touted the USDCAD as a buy. Their trade was to buy at 1.2872, targeting 1.3180 with a stop loss at 1.2680.
The reasoning is based on a stronger signal from FOMC's Yellen later this week at Jackson Hole. They add that their "analysis suggests that commodity currencies such as the CAD, NOK and AUD will be most sensitive to repricing of the US rates outlook, with the CAD most vulnerable to a US rates move"
For bank trade recommendations, consider eFXplus.
