Lower and upper trend line converging. 100 hour MA moving toward price too
The USDCAD is trading sideways in trading today with a low to high trading range of only 22 pips. That compares to a 22 day average (about a month of trading) of 52 pips. The volatility today is so far contained and traders await the next shove (either higher or lower).
As the price consolidates, so do the technicals.
On the downside, the pair stalled against a lower trendline defined by recent lows on the hourly chart (see red numbered circles). That trend line currently comes in at 1.3086 (and moving higher).
On the topside, a downward sloping trendline going back to the high from October 10 cuts across at 1.3104 (and moving lower). A break above would be a tilt and the bullish direction. Having said that, the 100 hour moving average currently at 1.31124 (blue line on the chart above). That will also need to be broken to give the buyers more confidence.
The current price trades around 1.3095 between the defined technical levels.
Taking a broader look at the daily chart below, the low from yesterday was near the swing low going back to February 1, 2019 at 1.3068. That low reversed the markets sharp decline and was not broken again until the end of June and into July (where the markets chopped up and down around that level).
The current move lower in October, has traders re-respecting the February 1 swing low on the 1st test. Does that give the dip buyers some ammunition for a rebound? Sure. It could. Stay above is more bullish. Move below is more bearish.
However, there is more work to be done if the low is in place and a more substantial gain is to be achieved.
On the topside from the daily chart, the 1.3134-50 area is a swing area over the last 4 or so months (see yellow area on the chart). That area would need to be breached (as well) to give buyers more confidence.
Him