USD/CAD is once again testing the 1.26226 level today. This level provides traders with a very interesting decision. Will price break out higher from here or respect the level and fall back lower again? A break higher is supported by the creation of higher lows since the middle of last week, and the 50-period MA at 1.26743 represents the first target for longs. A short squeeze would take traders to the 1.27243 area, with the 100-period MA at 1.27449 and the 200-period MA at 1.27704. The 1.27773 level contains the falling blue trend line, with a break above targeting 1.29000 and 1.29420, with 1.30000 above. The highs at 1.31241 are a target for longer timeframe traders.
The short side is supported by 1.25884 and 1.25545. A loss of this area would target the low of last week at 1.25432, with the 1.25000 level below. A test of the blue supporting trend line at 1.24872 could find buyers. However, weakness could see 1.24000 tested, with rising support at 1.23545.
This pair has found new lows, breaking under the low from late March at 0.86671 (after triggering shorted based on the bear flag pattern), which has been retested today as resistance. Further support can be seen at Friday’s low of 0.86278, with a loss of this level targeting 0.86000. Support below comes in at 0.85400 and the 0.85000 level.
Resistance can be seen at the 0.86900 level and the falling blue trend line. The 50-period MA is located at 0.87015, with the 0.87162 level above. The 100-period MA comes in at 0.87291, with the 200-period MA falling through 0.87645 on its way to the 0.87574 level. There is a considerable area of resistance around 0.88000 that was observed during March and this area can once again have an impact on price should it be reached.
By Edward Anderson, FxPro Analyst
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