The USDCAD has extended to a fresh low for the day and its lowest level since June 17. In the process, the pair has broken below the swing lows from July 17 and July 20 at 1.4003, with today’s low reaching 1.3993. Despite the break, the price remains above the 38.2% retracement of the rally from the May 1 low at 1.35508 to the June triple-top high at 1.42473, which comes in near 1.3981.
The latest leg lower began after the corrective rebound from the June 20 low stalled at the former floor between 1.4130 and 1.4148. That failed retest kept sellers firmly in control, leading to a break below both the 100- and 200-hour moving averages yesterday. Broad-based U.S. dollar selling has simply added to the bearish momentum today.
Even so, the USDCAD’s decline has been relatively modest compared with some of the other major dollar pairs. The USDJPY has been the standout mover, falling about 2.75% on growing speculation of Japanese intervention. Elsewhere, the USDCHF is down roughly 1.11%, while the NZDUSD (+1.47%) and AUDUSD (+1.05%) are also posting gains of more than 1% against the U.S. dollar.
From a technical perspective, the break below 1.4000 is an important step for sellers, but the next test comes near the 38.2% retracement level. A move below that target would strengthen the bearish bias and shift the focus toward deeper retracement objectives.
This article was written by Greg Michalowski at investinglive.com.
