Adam called the USDCAD right. The BOC hiked by 50 basis points instead of 75 basis points, and that initially sent the USDCAD higher (CAD lower). However, as Adam pointed out in his post, the Bank of Canada surprise move could set the stage for the CAD rally. That is exactly what happened. Click on the picture below to read Adam’s post.
BOC surprise could lead to a CAD rally
From a technical perspective, the high price stalled in a targeted upside resistance level between 1.3637 and 1.3666. The high reached between those levels at 1.3650.
USDCAD falls back below the 200 bar MA on the 4-hour chart
On the move off that high, I wanted to see support near the 1.3600 level to hold support (see my post decision post here). That did not happen. The buyers turned to sellers. The price moved down.
What now?
The price decline has now taken the price back below the broken channel trend line and also the rising 200 bar MA on the 4-hour chart at 1.3570 (green line on the 4-hour chart above). Going forward, staying below that MA (and trend line near the same level) keeps the sellers in firm control.
On the downside, the 1.3500 is the next key target to get to and through. Below that the 50% of the move up from the September 13 low comes in at 1.3465. Move below that level opens the door for further selling.
Buyers had the shot.
Those buyers could get above the upside targets up to 1.3666 or stay above the 1.3600 level. Now with the price back below the 200 bar moving average on the 4 hour chart and the downward sloping channel trendline, the sellers hold the strongest hand. Can they keep the pressure on? If so, the 1.3500 level followed by the 1.3465 that level would be the next major targets to get to and through