Spike higher certainly rejected the test of the 100 hour MA.
The USDCAD is making a new session low – taking out the London morning session low at 1.29317. The low just reached 1.29279. Can the momentum continue? The move to new lows was only good for a few pips. Be careful especially in the up and down day.
Looking at the chart above, the spike move to high on the hourly chart was certainly rejected (if you look at the chart, it looks as if the market “flipped the bird” at that rise).
It is never good to see a run higher move back to the start point in the same bar – leaving a big tail on the bar. When the price moved back below the 1.2874-798, it was all over (yellow area). Buyers gave up and sellers took back control.
Drilling to the 5-minute chart, the messy price action is evident. It looks as if the lucky sellers are happy to buy a low for now. It does not mean that the price can’t go lower. It might just be in reaction to lack of momentum on the new low. If the low is taken out, I would not mess with it. If the price is able to climb, the 100 and 200 bar MAs at 1.2954 and 1.2959 will be eyed. The 38.2% of the day’s move is also there.
Volatility like we have seen in the pair is an invitation to cautious trading. Traders will eye trade opportunities but don’t fall in love with your positions. The markets can turn on a dime and reverse.