USDCAD tries to keep the upside momentum going

The USDCAD fell below its 100 and 200 hour moving averages yesterday, and moved down to test a lower swing area and 38.2% retracement between 1.26496 and 1.26628.

The low price reached 1.26566. That was also near the swing low from last Thursday’s trade.

Today, the price is getting a boost helped by a decline in crude oil prices (weakening the CAD). The price of crude has now moved below the $89 level at $88.86. That’s down around $2.35 on the day. Recall from last week, the price of crude oil reached a seven year high of $93.17. The decline from the high is 4.6%. However it also comes after a surge from the December 2 low of $62.43 of nearly 50%.

That move lower in crude oil has helped to push the USDCAD today back to – and through – the 100 and 200 hour moving averages currently at 1.2699 and1.2708.

The high price reached 1.27189 which stalled within a swing area between 1.2712 and 1.2725 (see green numbered circles). So far, the 100 hour moving average has been able to hold support in the short term on the modest move back down. However, a move below that level with more momentum could see the buyers turn to sellers on disappointment against topside resistance.

Conversely, if support can now hold against the moving averages (blue and green lines), a move above the 1.2725 would open the door for a move toward 1.27475 (see blue numbered circles on the chart above). That was swing highs and swing lows going back to the end of January. Move above that level and traders to start the eye the highs from January and last Friday near 1.2787 to 1.27958.

On Friday, recall the US jobs and Canada jobs report came out. While the US jobs data was stronger, the Canadian jobs data was weaker (due to omicron). The run to the upside, however, did find sellers ahead of the January (2022) highs near 1.27958. The high on Friday reached 1.27875.