As the week comes to a close, it is important to take a look at the USDCAD currency pair with an eye to the week ahead.
This week, price action became more volatile on Wednesday thanks to the FOMC decision on interest rates. The initial move was to the downside, but the 100-bar moving average on the 4-hour charts stopped the decline (just like it did on September 9).
The subsequent move to the upside saw the price rise above a set of moving averages including the 100- and 200-hour moving averages, the 200-day moving average and the 200-bar moving average on the 4-hour chart. The price also extended above the 38.2% retracement level of the move down from the August high of 1.3633.
From there, the price fell yesterday, eventually breaking the lower moving average at the 100-bar moving average on the 4-hour chart. This break failed and since then, the price action has seen choppy up and down movements within a more restricted range but still volatile ups and downs.
What the price action did today was to stop the rise near the 100 and 200 hourly moving averages converging at 1.35825. Staying below these moving averages tilts the technical bias to the downside.
So what might give sellers more control or what might shift the bias more in favor of buyers.
To add to the bearish bias, a break below the 100-bar moving average on the 4-hour chart at 1.35505 – and staying below it – would increase the bearish bias and give sellers more confidence.
What would increase buyer confidence?
A break above the 100- and 200-hour moving averages at 1.35825, the 200-day moving average at 1.3589, and the falling 200-bar moving average on the 4-hour chart at 1.35986 are the steps needed to increase the bullish bias and hopefully lead to further momentum through the 38.2% retracement at 1.3633.