November 05, 2024 at 06:00PM
The USDCAD is moving lower in sympathy with the overall US dollar weakness ahead of the election vote and results (at least some of them) later today. The move lower was also helped by the failure to keep the upside momentum going after breaking to a new high for the year (and going back to 2022) on Friday.
THe price gapped lower on Monday and momentum has continued today.
The move to the downside has reached the rising 100 bar MA on the 4-hour chart at 1.38506. Below that, the price is testing a swing area between 1.3833 and 1.38475. If that level is broken, the swing lows from two weeks ago at 1.3813 will be the next target followed by a swing area between 1.3786 and 1.37919. Finally the 38.2% retracement of the move up from the September low comes in at 1.37526.
All those levels are within reach given the volatility potential from the US auction.
On the topside, the target levels of the topside include 1.3864, 1.3888, and the high from August at 1.3945. The high price from Friday extended up to 1.3958 which was the highest level going back to 2022. The high price in 2022 reached 1.3977.
What the price is trading around a swing area down to 1.38337 and just below the 100 bar moving average on the 4-hour chart and 1.3506, the pair is adding more neutral level after the sharp trend move in October (and into early November) saw the price move up from about 1.3472 to the high price at 1.3958. That was a pretty strong move a short period of time. Correcting modest lower makes sense ahead of the risk event.
USDCAD Technical Summary
Current Situation
Moving lower due to US dollar weakness ahead of the election.
Failed to maintain upside momentum after breaking 2022 highs on Friday.
Gapped lower on Monday, with ongoing downward momentum.
Key Levels
Support
1.38506: Rising 100-bar MA on the 4-hour chart.
1.3833-1.38475: Swing area.
1.3813: Swing lows from two weeks ago.
1.3786-1.37919: Swing area.
1.37526: 38.2% retracement of the move up from September low.
Resistance
1.3864
1.3888
1.3945: August high.
1.3958: Friday’s high, highest level since 2022.
1.3977: 2022 high.
Market Context
Trading around swing area (1.38337) and below 100-bar moving average (1.3506).
Neutralizing after sharp trend move in October and early November.
Correcting lower ahead of risk event.
This article was written by Greg Michalowski at www.forexlive.com.
