Weaker numbers but rally in USDCAD hits resistance and backs off
The USDCAD has moved higher after the weaker employment
report. The unemployment rate was higher than expected, in a change in employment was weaker.
Looking at the hourly chart, the price rise moved back up to
a broken neckline trend line and the 50% of the move down from the Wednesday
high at 1.32745. On the move higher the price moved above a swing area at
1.32469 (highs from August 1 and August 5), the 100 hour moving average at
1.32528 (blue line), and the underside of a broken trend line at 1.3258 (add
the 38.2% retracement too). That area
is defined by the yellow area in the chart above.
The price decline off the 50% midpoint, moved back to that yellow area. and the price consolidated
in the area for a while (from 1.32469 to 1.32581).
That area was just broken. The price break has seen some buyers turn to sellers (stops trigger) and the price has scooted lower. We now look back toward the 200 hour MA at
1.32231 for support. UGH.
The numbers were bullish for the USDCAD, but the pair was
reluctant to go too far. I would expect support buyers to show up near the 200 hour MA, but the waters are muddy technically. Even if the pair finds support buyers now, it will take a move back above the yellow area to give buyers more confidence.
PS oil is higher (crude oi is up $1.51 now) which supports the CAD and is helping to take some bull out of the USDCAD pair.