The USDCAD stretches to the upside , but backs off. What next? | Forexlive

The USDCAD has moved outside of the up and down “red box” that confined lows and highs over the last three trading weeks today, but has more recently moved back to retest the area. Key support.

Looking at the 4-hour chart above, the pair moved lower earlier this week, bottoming ahead of the lows from the end of January. The area between 1.3262 and 1.3272 is the low of what has been a up and down swing area for the USDCAD (the “red box” in the chart above).

The rally over the last 3 trading days, saw the price move to the higher extreme area between 1.34678 ad 1.34749. The price moved above that area briefly yesterday, but backed off before making another run to the upside in the new trading day today.

The break above the high of the “red box” led to momentum to – and then through – the 100 day MA at 1.35172 and to the 61.8% of the move down from the December high at 1.3535. The price has since moved back lower and the corrective low off the high just reached the high swing area of the “red box”. The low just reached 1,34689. That is within the higher swing area between 1.34678 and 1.34749. The price is back at 1.3488.

What now?

The holding above the “red box” high is encouraging in the short term. Having said that the disappointment above the 100 day MA now pits the buyers vs the sellers with support down to 1.34678 and resistance at the 100 day MA at 1.35173. Move outside one of those extremes and find