USDCAD hits new year high in December but locks in against 100-week MA drop | Today Headlines

USDCAD hits new year high in December but locks in against 100-week MA drop

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The USDCAD recovered at the end of the year but stalled at 100W MA

The USDCAD had a year of bearish, rise, fall and rise, with the pair hitting the year-high from the 2nd to the last week of the calendar year. However, the new December high was only a few pips and it stalled near a key technical level (more details below).

A summary of the price action for the year, saw the pair start the year by continuing the fall that began in March 2020 when the price stalled just below the most recent high of 2015. High of 2020 reached 1.4666. The 2015 high reached 1.4589. The inability to surpass the 2015 peak in 2020 turned buyers into sellers.

USDCAD price closed 2020 near year-round low (at 1.2732) and continued its downward course in early 2021 to a low in late May 2021, just below natural support at 1.2000. The low hit 1,2006.

This low may have descended below a June 2015 low at 1.21267 and September 2017 low at 1.20612, but did not reach the May 2015 low at 1.19224.

From the 2021 low to 1,2006, the price rebounded to a mid-August high at 1.29492 (943 pips), which saw the price peak in a swing zone back to mid-2019. between 1.2924 and 1.2993 (see numbered red circles on weekly chart above). The ensuing fall saw the price return to its mid-October low at 1.2287 (down 662 pips).

The latest upward surge was the decline in the price of oil from its October 2021 high. The price broke through the mid-August high and hit a new 2021 high on December 20 at 1 , 2963.

This high for the year stalled in the upper swing zone between 1.29234 and 1.2993 (red numbered circles). It also stalled just off the declining 100-week MA at 1.2968 (blue line in the chart above). This MA is currently at 1.29634 and is moving lower.

The current price is trading near 1.2800 as the year ends.

What future for USDCAD?

2021 saw the price close at 1.2732. With the current price close to 1.2800 (below around 68 pips), it is virtually unchanged from a year ago. In between, the 2018 and 2017 swing troughs were broken, but the 2015 swing troughs remain intact. There was therefore a low close to the troughs of several years.

At the highs of the year, the pair first tested a fairly solid swing zone between 1.2923 and 1.2993 (see numbered red circles). then the MA down 100 weeks (to 1.29634). So there was upside resistance which also held up.

What is not mentioned on the upside is that the high stalled ahead of the 38.2% retracement at 1.3022 and the 200 week MA at 1.30622.

On the eve of 2022, this combined group of technical goals on top, including the

  • Swing zone (1.2924 to 1.2993),
  • MA 100/200 weeks (1.2963 and 1.3062, respectively) and
  • 38.2% retracement at 1.30224)

encompass the 1.2923 to 1.3062 area and will all need to be broken in 2022 to increase the bullish bias. The 50% retracement at 1.33364 and the oscillating area between 1.3327 and 1.33639 would be the next major targets on a breakout higher.

In the absence of a breakout of this upper zone, and the pair remains contained and below the old low of 2019 and part of 2020, which has now developed into a high in 2021.

So, despite the upward movement from the late May / early June low, the longer term technical view would only be a downward correction from the 2020 high. The bias would remain bearish. However, breaking through the aforementioned resistance would dramatically change this view of buyers.

What would give sellers more comfort compared to the cap / 100 weeks MA in 2022?

Exploring the daily chart below, the pair moved above the 200 and 100-day MAs (green and blue lines) in November, and during the downward correction in early December, found willing buyers just before that. the higher 100 days MA (blue line).

This 100-day MA is currently at 1.26204 (and moving higher), which is also near the midpoint of 50% of the rise from the October low.

If sellers can eventually pull back below these two levels followed by the 200-day MA at 1.24943, sellers would again have full control.

USDCAD

USDCAD price is trading above 100/200 day MA

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USDCAD hits new year high in December but locks in against 100-week MA drop

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