What a sell off today on the USDCAD, as we mentioned yesterday the short term support of 1.41 off the 21 ema was all it took for the london open to start the rally combined with a surge of oil prices staying above 30$. USD ADP news failed to impress anyone even though a 205 didn’t seem so bad, and the release in oil prices just helped it push further higher. All in all it was pretty much a perfect storm for the CAD today gaining 350 pips in a single day.
We can look for any retrace back to 1.39 or off the 8 or 21 ema to rejoin the bearish movement. If 1.375 doesn’t hold we can look for further support between 1.345-1.335 area, right where we were in november before the bullish rally. I’d be very cautious if we arrive to the 1.345 zone as we can see the 150-200 ema’s creeping up around that area. The same time period goes for oil and the 38-40$ area.
Seeing as my previous mentioned support of 1.38 was disregarded by the market, I went back into time and noticed the 1.375 was an old resistance from 1994-1996 and 2002-2004. Seems a little far away but non the less interesting to see.