USDCAD moves back above the 100/200 hour MA after breaks lower this week failed (twice)

The USD/CAD experienced significant volatility earlier this week, initially moving lower on Monday following the Trump tariff story and its subsequent denial. On Tuesday, the pair reversed back lower once again, before rebounding higher to close stronger on the day.

During this back-and-forth movement, the price briefly moved outside a previously confined trading range (Red Box on the chart below) defined by a lower swing area between 1.4334 and 1.4348 and an upper swing area between 1.44487 and 1.4466. However by the close of trading yesterday, the price was back into the Red Box.

In today’s trading, the corrective move lower during the Asian-Pacific session pushed the price into the lower swing area, where buyers stepped in and drove the price back upward.

This rebound extended above the 100- and 200-hour moving averages, which are positioned between 1.43748 and 1.4382. Since breaking above these levels, the price has held steady above the moving averages, shifting the short-term/intermdiate bias in favor of buyers.

If this bullish momentum continues (with the current price near 1.4396), a move toward the upper swing area of the “Red Box,” between 1.44487 and 1.4466, is anticipated.

Conversely, if the price falls back below the 100- and 200-hour moving averages, it would tilt the bias back in favor of sellers, with traders likely targeting the lower swing area between 1.4334 and 1.4348.

This article was written by Greg Michalowski at www.forexlive.com.