USDCAD bounces off retracement support. Can the buying continue toward the highs now?

The USDCAD moved up for 9 consecutive days and was on its way to 10 straight on Tuesday before hitting a resistance target area near 1.3833 to 1.3847 and finding sellers/profit takers.

The move back to the downside saw the price move down for 2 days and back to a low today of 1.3743 – just above the broken 61.8% of the move down from the August high.

The price has bounced off that level which kept the buyers more in control and stopped the sellers momentum. The price has moved to another swing area between 1.3786 and 1.37919. Getting above that area is the next hurdle that would give the buyers more confidence for another push toward the higher targets.

Helping the bearish bias in the CAD, the Bank of Canada meets next week with most economists expecting a 50 basis point cut (see Reuters poll released earlier here). The US Fed may still be on a recalibration tract, but the better-than-expected data could keep the Fed cautious absent more declines in inflation. The CPI data this month was higher than expected. PCE data is not released until october 31.

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