USD/CAD Stuck Between 2 MAs Until Evening

USD/CAD was consolidating in a range for several trading sessions but started to make a move after the release of the US CPI numbers, temporarily falling below the support zone around 1.3550. However, it rapidly reversed higher, climbing above technical indicators which was a bullish sign.

On the 4-hour chart, we can see that the most recent leg lower was strong but it stopped just above the ascending trend line from the daily chart and it was followed by the reversal higher. In the image, we see that this pair started to retreat lower slightly, but the 50 SMA (yellow) turned into support, holding the price several times.

Yesterday we saw a jump off this moving average in USD/CAD , but the 100 SMA (green) stopped the climb and after an upside-down hammer candlestick which is a bearish reversing signal, the price started to fall lower. This shows resilience in the CAD once again, after holding well, while crude Oil which usually has a big impact on the Loonie has been crashing lower.

Following last week’s employment figures from the US, particularly toward the end of the week, crude Oil rose above $70, indicating a level of resilience in the US economy. However, crude oil prices reversed lower again yesterday and made a new recent low as a result of persistent concerns about global demand, particularly in light of disappointing economic statistics from China which is the world’s largest Oil importer. But, the CAD wasn’t affected which is a bullish sign to keep in mind.

However, not much action is expected today until the Federal Open Market Committee (FOMC) releases its monetary policy statement later in the evening, with interest rates expected to remain steady. We will examine the statement and Powell’s comments from the press conference for any hints about prospective rate hikes next year, so we’ll remain on the sidelines until then.

USD/CAD Live Chart