Looks to test lower trend line at 1.2516
The USDCAD is trading at session and new year lows at the 1.2520 level. The pair is about to test a trend line support target at the 1.2516.
Oil prices have just moved above the $46 level and trades at new highs for the day and going back to December 2015 (see prior post).
Key technical level for the loonie. It may need some help from the oil, but traders will always look for levels where risk can be defined and limited. This trend line provides an opportunity to do just that....(with stops if the pair starts trading more comfortably below the level).
The prior low for the day came in at 1.25266. A move back above that level will now be eyed as small step 1 if the support is to hold. The 38.2% of the days range comes in at 1.2552. That would be the next upside target. Finally, the 100 and 200 bar MA on the 5-minute chart ar the next upside targets to get above. They come in at 1.2560 and 1.2565
The burden is definitely on the buyers to prove they can take back control. They need to find support buyers against if that process is to begin. If not, lower the pair goes.
