The bearish momentum seems to have ended in USD/CAD, which has been gaining for about a month. Yesterday we saw some more bullish price action as the dip lower was bought on smaller timeframe charts, with the low coming at the 100 SMA (green) on the daily chart below, which shows that buyers are coming in at that area, which stands at around 1.3512.

The price has been able to hold above the broken 100 SMA which has turned into support in the last two days, after it was broken on bullish USD momentum. Before that, the 200 SMA (purple) acted as support, holding the retreat during the bearish period in the USD in the previous several months.

USD/CAD Daily Chart – The 200 SMA Held As Support

Now the 100 SMA has turned into support

That moving average held the price twice and by the middle of this month, we saw a bullish reversal after the second bounce, as the bearish period in the USD ended and the FED started sounding more hawkish on better economic data. Both of those moving averages will be barometers for the buyers and the sellers going forward. If the price stays above then buyers are in control, if the price moves below then this pair will be considered more bearish.

The highs in USD/CAD are still getting lower though and buyers will have to push above 1.3715 for the pattern to be broken and the larger trend to be considered bullish again. Although, with the FED keeping an aggressive monetary policy stance, markets continue to demonstrate a considerable amount of nervousness which will likely keep the USD bullish in the coming weeks. The slowdown in inflation has been losing pace as well, which is another reason the FED will use to remain hawkish. Some members pushed for a 50 bps hike in the last meeting, so we might get that in the future. We will continue to buy dips at the 100 SMAon this pair though.

USD/CAD Live Chart