Forex technical analysis: USDCAD back to where it all started yesterday

100 and 200 hour MA stall the tumble

Yesterday the USDCAD raced higher. Oil. Concerns about NAFTA. Technically, in yesterday's trading the pair held support against the 100 hour MA (blue line), busted above the 200 hour MA and raced higher. The pair later moved above the 200 and 100 bar MAs on the 4-hour chart, and 50% retracement of the move down from the August high.

All that yesterday was bullish, bullish, bullish.

Well today has seen the exact opposite. After moving even higher and above the 61.8% at 1.26485, and an old floor level at 1.26528, the breaks failed. The 100 bar MA and the 200 bar MA on the 4-hour chart was rebroken, this time to the downside. The price moved back below the 50% and the 38.2% (at 1.25688). The price even moved below the 200 hour and 100 hour MA but the move below the 100 hour MA at 1.25292 was only good for 5 pips (to 1.2524). That 100 hour MA was where it all started yesterday. Higher GDP contributed to the sharp declines.

So the lap from the 100 hour MA has been completed. In between was a 163 pips move higher and now a 137 pip move lower.

What now?

There are different balls in the air for this currency/pair.

Oil prices (up $1.15 today) are having an impact a bullish impact on the CAD.
NAFTA talks could be negative for the CAD if they collapse or Trump gets too many concessions.
The economy and the central bank. Much better GDP today and CIBC sees a September hike now.
Then there is the Fed.... What do they do? Does the USD start to get more bid.

So you have to be ready for anything.

For now it is hard getting in the way of a fast and directional move. That last move was down, but traders focused on risk defining levels will lean against a support level and the 100 hour MA (and 1.2525) are support. However, on a break of the level, I would not be anxious to get in the way (look for stops).

On the topside a move back above 1.2577 (38.2% of the day's trading range - see chart below) will not be great for the bears. A move above 1.2593 would be more of a concern. The 1.2593 is the 50% of the days range and would also take the price back above the 200 bar MA on the 4-hour at 1.25898 currently.