USD/CAD Bounces Off the 50 SMA Again Today

USD/CAD bounced twice off the 50 SMA this week and today it is heading higher

Skerdian Meta•Wednesday, May 6, 2020•1 min read

[[USD/CAD]] surged higher in early March, as the coronavirus flu broke out in Europe and North America, sending shivers through markets. That increased the demand for the USD immensely as world reserve currency and also hurt the risk sentiment and risk currencies such as the CAD, which sent this pair surging around 12 cents higher.

The crash in crude Oil prices also had a major impact in the decline for the CAD. But, the price retreated back down from there and it has been trading in a ranges since then. The range has been wide enough for long/mid term trading, at around 400 pips.

The price has formed a support level at at 1.3850s where it has bounced off from twice, but it seems like buyers are gaining confidence, since they are jumping in higher this month. We saw this pair bounce off he 50 SMA (yellow) on the H2 chart yesterday and it did so again today, as crude Oil turned bearish after a pullback higher in the last couple of weeks. So, the 50 SMA looks like a good place to go long on USD/CAD now and we will wait for another retrace down there.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.