The USDCAD sellers are scoring some short-term victories.
First, the price stalled against a topside trendline at session highs both yesterday and again today. Sellers leaned against that resistance and pushed the pair back below its 100-hour moving average at 1.42488. That break gave sellers another reason to probe the downside.
The price is now attempting to break below the 200-hour moving average at 1.4227. Getting below—and staying below—that level would strengthen the bearish bias and open the door for a move toward the swing support area surrounding 1.4200.
Sellers are making progress, but they still have work to do. After the trend move run-up from the September 8 low, giving up on the bullish trend requires proof (more proof).
However, if the 200-hour moving average – the immediate hurdle – is busted, the case for lower is strengthening.
Conversely, if buyers hold that level and push back above the 100-hour moving average, the sellers’ recent gains would start to unravel.
For traders, those moving averages help define risk and measure control. Stay below 1.4227, and sellers have the stronger hand. Move back above 1.42488, and buyers get another shot.
This article was written by Greg Michalowski at investinglive.com.