USDCAD moves toward key swing area
The USDCAD is breaking higher away from the 50% of the move down from the March high to the April low. The low came in at 1.35808. The low price today bottomed at 1.3585. Yesterday the price broke above the 50% retracement and also held support against that 50% level (at 1.3583). Bullish.
Looking at the 4-hour chart above, the move to the upside has now approached the 61.8% retracement of the same move lower (from the March high). That level comes in at 1.36472. Just above that is a swing area between 1.36504 to 1.36674. That area has been a ceiling and floor going back to February (yellow area and red numbered circle). In April, the price moved back into that area and found willing sellers on the test. The subsequent selling took the price down toward the April low bottoming at 1.33137 on May 8, before starting the move back to the upside once again.
This area is a key target. The high price today reached 1.3644, and sellers initially leaned. However, it would take a move back below the 50% retracement level to hurt the bearish bias in the medium term.
Traders – looking for a close risk level – will watch the 1.3613-18 area as closer support. That area is defined by swing highs from earlier in the day and swing lows from more recent price action (see 5-minute chart below) The current price trades at 1.3637.
USDCAD close risk defined