The USD/CAD was very volatile earlier in the week, initially moving lower on Monday following the Trump tariff story and subsequent rejection. On Tuesday, the pair returned lower again, before returning higher to close stronger on the day.
During this back-and-forth movement, the price briefly moved outside a previous trading range (Red Box on the chart below) defined by a lower swing area between 1.4334 and 1.4348 and upper swing range between 1.44487 and 1.4466. But by the end of trading yesterday, the price was back in the Red Box.
In today's trading, the corrective move lower during the Asian-Pacific session pushed the price into the lower swing zone, where buyers stepped in and driving the price back up.
This rebound extended above the 100- and 200-hourly moving averages, which are located between 1.43748 and 1.4382. Since breaking above these levels, the price has been stable above the moving average, changing the short-term/interim bias in favor of buyers.
If this supportive trend continues (with the current price near 1.4396), a move towards the upper swing area of the “Red Box,” between 1.44487 and 1.4466, is expected.
On the other hand, if the price falls back below the 100- and 200-hourly moving averages, it would lower the bias in favor of sellers, with traders likely to focus on the swing area. lower between 1.4334 and 1.4348.
