MAs Turing Into Support for USD/CAD Now That It Has Climbed Above Them
Skerdian Meta • 1 min read
USD/CAD turned really bullish during the last week of February and during the second half of March, as sentiment turned massively negative due to the coronavirus outbreak. Risk currencies such as the commodity dollars turned bearish, while the USD rallied higher, sending this pair surging 12 cents lower in less than two weeks.
But, the climb ended at 1.47 and USD/CAD slipped lower until mid June, stopping above 1.33. The price climbed higher, but the 100 SMA provided resistance on the daily chart for this pair, stopping it from moving higher. That moving average has been placing a top on USD/CAD since the, providing resistance twice.
At the bottom, the 20 SMA (grey) turned into support on the same time-frame chart, so USD/CAD has been confined between these two moving averages for about two months. On the H4 chart, the 200 SMA has acted as resistance since late June. But, that moving average was broken to the upside last night, as the USD continued its climb and now it seems like the 200 SMA has turned from support into resistance now.
If that’s the case, then pullbacks at the 200 SMA should be good opportunities to buy this pair. But, we will wait for a bullish reversing candlestick. The price is already starting to bounce off this moving average, so this is a confirmation that the 200 SMA is turning into support for USD/CAD.