USD/CAD Reverses at the 50 SMA, But Sellers Face the 20 SMA Now
[[USD/CAD]] has turned quite bearish this month, especially after the US ISM manufacturing report showed on the first day of December that this sector is falling deeper in contraction. The additional production quotas from OPEC+, which cut Crude Oil production by another 50k barrels/day, added more strength to the CAD, sending this pair further down.
During the decline, moving averages turned into resistance, with the 200 SMA (purple) dong so early in the month and the 50 SMA reversing the price down late last week, after the sentiment improved, following the US-China Phase One deal. Yesterday, the price reversed again at the 50 SMA on the H2 chart.
We went short on this pair yesterday at the 20 SMA (grey) when this pair was retracing higher. But, the pullback continued higher and reached the 50 SMA on this time-frame. Today, the price has reversed down from the 50 SMA, as WTI Crude Oil continues to climb higher. So, our trade here is safe, but sellers now face the 20 SMA (grey). USD/CAD is trading between these two moving averages now and if they want to resume the larger bearish trend, they will have to push below the 20 SMA soon.
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