Autumn continues for the pair
USDCAD failed in its attempt to expand to a new high and break above a trendline on the daily chart. The pair’s bull run also failed to hit its 100-day MA at 1.34406 (blue line). All of these failures gave the vendors ammunition and the price dropped. The range today is now 116 pips. This is well above the average range of 87 pips seen in the last month of trading (around 22 days).
Basically, a move towards the pair is helped by a weaker US dollar (weaker stocks leading to risk on flows) and higher oil prices. The price of crude oil has just passed $ 40 and is trading at $ 40.27. The low at the start of the session hit $ 38.68. Prices are currently up 2.37% on the day.
Exploring the hourly chart below, the pair has just moved to new session lows over the past hour, and in the process extends below the 38.2% retracement of the move from the low. September 16 at 1.33076. Stay below and the pair will start to turn to swing lows on September 22-23 from trading last week. These levels stand at 1.3293 and 1.32827.
The closing risk for sellers looking further down is now at 1.33238.
Can dip buyers get involved?
The ranges have widened (116 pips vs. 87 pips on average), but it would take movement and momentum above the 38.2% retracement at 1.33076 in the absence of a move to swing low levels. aforementioned at 1.3293 and 1.328257. I would expect these levels to generate more interest from buyers.