The USDCAD has been up 4 of 5 days this week. The low was made on Monday at 1.2553, and that level was tested again ahead of the Bank of Canada decision on Wednesday when the low reached 1.2558 (just 5 pips from the low).
The BOC kept rates unchanged. The market was leaning -70/30 – in favor of a hike. As a result, the CAD sold off (higher USDCAD). Technically, the price also based near the 100 hour MA before moving higher.
The more hawkish Powell later that day, sent US yields higher in the short term, sending the USD and the pair even higher.
Today, the high for the week was reached at 1.27958. The price has wandered lower in the North American session as stocks rebounded and yields started to come down a bit as well taking some pressure off of the dollar buying. However, the low self or your 1.2747 has stalled against the high from yesterday and the early Asian high near the same level. There is also a fairly steep trendline just above the level which may also be in play for dip buyers.
It would take a move below the 1.2747 level to give the sellers some comfort for more downside probing. If broken, a move back toward the low for the day at 1.2712 and the 38.2% retracement of the move up from the Wednesday low at 1.2705 would be eyed. That would be the minimum targets if the sellers are to take back more control going forward..
Looking at the daily chart below, a silver lining for bears, is that the high for the day stalled ahead of the earlier high for January at 1.2813. That may give sellers additional hope IF the 1.2747 level can be broken….
