USDCAD setting up for a new leg lower?
In today’s update, we are looking at the USDCAD off the daily chart as sellers look to be pushing at a new leg lower.
Yesterday sellers put to bed a quick recovery rally from buyers by not only killing the candle but by also breaking below 1.2855 support. This could be significant as that support level has stood for buyers since June.
On top of the support break, we can also see a trend break and a new LH with the moving averages crossing and sloping downwards. The OBV indicator is also sloped down and has set two LHs.
Today price has run lower after a brief attempt to fight back, and we are looking for sellers to break the final point of demand at 1.2820. A close below that point could set of a new leg lower. Also supporting sellers at this stage is a higher oil price. So far, USOUSD is 1.58% higher. Normally when oil is higher, the USDCAD is lower as the CAD is a commodity currency and rallies with oil.
If we see a reversal and close back above 1.2855 that would be a worry for the current idea. Thursday mornings (AEST time) FOMC meeting could also have an impact on this picture. The market expects a rate increase to 2.50% from the FED this week.