USDCAD finds support against cluster of moving averages
In an earlier post, I commented how the USDCAD fell below a key swing area (old floor) between 1.3517 and 1.35266, and the 100-day moving average . I commented:
Technically if the price can stay below the 100-day moving average, that is the best-case scenario for the downside potential. Alternatively staying below 1.35266 (high of the old floor from April 21 through May 5), would keep the sellers in play.
The price did extend briefly above the 100-day moving average, but could not enter the swing area at the old floor (between 1.35175 and 1.35266). The sellers returned, pushing the price toward a cluster of MA targets to the downside including the:
- 200-hour moving average 1.2461
- 200-day moving average 1.24575
- 100-hour moving average 1.24514
The low price reached 1.24585 (between the 1.24514 to 1.2461 swing area), and has bounced higher. The current price trades at 1.34708
Overall the market has been trending to the downside today. However, the cluster of moving averages represents a tough nut to crack. It will take a move below each to increase the bearish bias.
On the top side watch 1.34905. That is a 50% midpoint of the range since the April 28 high. Get above that, and then traders would target the 100-day moving average 1.3511.
SUMMARY: With the cluster of moving averages holding support, buyers and sellers are more balanced. A battle will now take place between 1.34905 above, and 1.3451 below. Look for the next shove outside of those support and resistance levels to give traders clues to the next move.