The USDCAD has spent a lot of the buying and selling instances since September 23 between 1.3543 to 1.38375. Sure, there was a transfer decrease on October 4 and into October 5. There was a transfer above earlier this week on Tuesday. Each breaks had been comparatively modest earlier than rotating again into the vary.
Then at present got here alongside and there was a break and run to the upside. The transfer too the pair racing to the upside an all the way in which to 1.3977. That may be a run of 140 pips above the higher excessive.
Nonetheless, we all know the consequence.
The consumers turned to sellers. Technically ranges had been damaged on the draw back that ought to not have been damaged. When the worth fell again into “the vary”, there was extra promoting.
Please see my video HERE for my prelude to the sharp reversal decrease. For the USDCAD discusssion go to 1:15 within the video.
That promoting has now taken the pair to – and thru – the 100 hour MA (blue line within the chart above), after which right down to the 200 hour MA (inexperienced line within the chart above) at 1.37098 at present. The low simply bottomed at 1.37061. There was a modest bounce off the MA.
Going again to final Friday, the low worth on that day additionally discovered help consumers in opposition to the 200 hour shifting common. That will increase the degrees significance going ahead. Therefore the consumers willingness to lean in opposition to the extent.
Placing it merely, danger could be outlined and restricted in opposition to the 200 hour shifting common. If the worth had been to interrupt beneath with momentum, dip consumers may promote and take a small loss. Conversely the dip consumers in opposition to the extent are hoping that the USDs transfer again to the upside is reignited.
What would possibly that seem like?
Getting again above the swing stage between 1.37526 at 1.37657 could be step 1 that space held resistance final Thursday final Friday and on Monday earlier than extending to the upside. Throughout buying and selling yesterday, the world additionally held help (helped by the help consumers in opposition to the 100 hour shifting common as nicely – blue line)
Get above that swing space and the 100 hour shifting common 1.37831 could be the subsequent goal to get to and thru. Transfer above that stage and merchants will likely be speaking as soon as once more concerning the 1.3807 – 1.38375 swing space.
So consumers are stick a toe within the water after the sharp transfer to the draw back.
The roadmap again larger is outlined. It’s as much as the market merchants to see if the sellers can now flip again consumers
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