As the clock ticks toward the weekend, a look at the USDCAD with a look toward next week is important.
This week, the price action got more volatile on Wednesday helped by the FOMC rate decision. The initial move was to the downside, but the 100-bar moving average on a 4-hour charts stalled the fall (just like it did on September 9).
The subsequent move back to the upside took the price above a cluster of moving averages including the 100 and 200-hour moving averages, the 200-day and 200-bar moving average on a 4-hour chart. The price also extended above the 38.2% retracement of the move down from the August high at 1.3633.
From there, the price plunged lower yesterday which ultimately broke below the lowest moving average at the 100 bar moving average on the four hour chart. That break failed and since then, the price action has seen volatile up-and-down moves within a more confined range but still with up and down volatile.
What the price action today has done is stall the rise near the converged 100 and 200 hour moving averages at 1.35825. Staying below those moving averages tilts the technical bias more to the downside.
So what would give the sellers more control or what would shift the bias more in the favor of the buyers.
To increase the bearish bias, getting below the 100 bar moving average on the 4hour chart at 1.35505 – and staying below – would increase the bearish bias and give sellers more confidence.
What would increase the buyer’s confidence?
Getting above the 100 and 200-hour moving averages at 1.35825, the 200-day moving average at 1.3589, and the falling 200 bar moving average on the 4-hour chart at 1.35986. Those are the steps needed to increase the bullish bias and would hopefully lead to further momentum through the 38.2% retracement at 1.3633.