The USDCAD remains in an up and down trading range that has confined the pair in a 75 pip trading range over the last three trading days.
The low has been near 1.2650. The high comes in at 1.2725. IN between sits the 100/200 hour MAs which has seen moves above (briefly) and below today. The 100 hour moving average comes in at 1.2706. The 200 hour moving average comes in at 1.27825. The last two hourly bars have moved below the 200 hour moving average, but the 38.2% retracement of the last move up from the January 19 low, stall the fall at 1.26628.
With the price moving up and down, traders are unsure of the next move. There most likely looking for the next shove outside the top or bottom extremes.
Taking a broader look at the daily chart, on a move lower, the 100 day moving average 1.26214 would be targeted. Get below and there should be more selling momentum. However since the price is currently above both the 200 and 100 day moving averages, the buyers to have a slight edge with regard to the bias. Having said that, there is work to be done to the upside. Going back to December 2020, most of the price action in the USDCAD has been confined to 1.2251-1.2302 on the downside, and 1.2926 to 1.3963 on the topside. That is close to 700 pips but apart from a month or so in May/early June 2021, the range is relatively narrow for a 14 month.
Fundamentally BOC Macklem said yesterday:
- There is some uncertainty about how quickly inflation will come down
- WIth labor markets tightening and evidence of capacity pressures increasing, the BOC expects higher rates will be needed to bring inflation back to 2% target.
- We are confident inflation will come down
- Latest GDP reinforces the view that Q4 growth was strong
- Inflation to remain close to 5% in the first half of the year
- There is some evidence that Canadians have not be dipping into excess savings
Those comments did send the USDCAD lower buy the pair could not extend back below the earlier session low nor stay below the low from Tuesday’s trading as well. Today, the price has grinded higher, but did find sellers near the 100 hour MA.
Read More: The USDCAD remains in an up and down range.