The USD/CAD pair continued its downward movement today on the back of lower interest rates and weaker US data. Technically, the price moved below the 100 and 200-bar moving averages on the 4-hour chart yesterday, and remained below those moving averages in the early Asian session today, before moving lower on the data.
The price also moved below its 100-day moving average, but has been trading above and below this level over the past four-hour bars. This level comes in at 1.36312. The price’s low today stopped at the high of the lower swing zone between 1.3600 and 1.36154.
Going forward, if the price manages to break below the 1.3600 level, the 200-day moving average at 1.3692, and the 38.2% retracement of the upside move from the December 2023 low at 1.3590 (and holds below those levels), this would represent a breakout and likely lead to further bearish momentum towards the 50% midpoint of the same trading range at 1.35114.
Conversely, a failure to break below 1.3590 to 1.3600, and a return to the 100 and 200 moving averages on the 4-hour chart, is likely due to a failure to capitalize on this week’s decline with a breakout of a multi-week trading range.
