The dollar is struggling across multiple charts on the week and USD/CAD is no exception. The loonie might be pinned down by falling oil prices this week but it still has been outperforming the dollar. And the slight fall so far today sees USD/CAD fall to its lowest since April on a break below its May and July lows.
Not only that, the drop is also taking out its 200-day moving average (blue line) at 1.3597. That helped to arrest the decline in the pair last month. However, it is giving way now and that puts sellers back in charge of the controlling bias.
From a technical perspective, the break lower here threatens a much steeper drop especially after another failed attempt by buyers to clear the 1.3900 mark earlier this month. That’s three years in a row now that the pair has at least tested the key level and failed.
The 100-week moving average at 1.3543 will be one to watch in the sessions ahead. But if the dollar keeps under pressure across the board, we might soon be arguing about a test of the late December lows near 1.3200 next. Or at least there is certainly plenty of room for discussion as far as price action goes.
This article was written by Justin Low at www.forexlive.com.
