USDCAD tests a key support level at 200 bar MA on the 4-hour chart

The USDCAD bounce sharply higher after falling after the US jobs report on Friday. The move to the upside ended up retracing all of the declines and the pair closed higher on the day. Note that the high price on Friday stalled against its 200 hour moving average (green line currently at 1.3692. See the chart above).

In trading today, the initial move was to the upside with the pair extending above its 200 hour moving out in the process. That should have led to increased momentum to the upside. Instead, the break failed, and buyers turned to sellers.

In the early US session, we’ve seen an extension to the downside, with the price now moving below its 50% midpoint of the April trading range at 1.36617. The price has also moved below a swing area between 1.3654 and 1.3668. However, support against the 200 more moving average on the 4-hour chart is providing a support for the pair. That level comes in at 1.3647

What next?

Get below the 200 bar moving average and stay below should increase the bearish bias with the 1.36319 as the next target. That level was the swing lows from April 26 and April 29

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