Moves toward swing area from May 16 to May 22
The USDCAD trades to a fresh session low and in the process is moving toward support at the the 1.3394-1.3400 area (lower yellow area).
That area is home to swing levels going back to May 16, May 21 and May 22. The level was a floor, then became a ceiling on May 22 briefly. The fall below 1.3400, was reversed also on May 22, and the run to the May 31 high was started.
The last three days has seen a significant retracement of the move higher – falling belwo trend line, 100 hour MA (blue line), 50% retracement, and 200 hour MA (green line) during yesterday’s trading. Today we moved below the 61.8% retracement at 1.34339.
Today the price waffled around the 1.3430 level (lows from May 24 and 27) before moving lower. That area is now a risk/bias defining level. Stay below is more bearish.
Markets like to pause at old floor levels. So the 1.3394-1.3400 should give sellers a cause for pause on a test. How far it bounces will be dependent on if it can get above the 1.3430 area. If so, the selling waters seen over the last 3 days will be more muddy.