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USDCAD remains stuck in the up and down trading range

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USDCAD remains stuck in the up and down trading range

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Moving higher today clears the decline after BOC’s decision this week

USDCAD remains stuck in the trading range that has the pair moving up and down since October 14. The maximum of the range during that time is 1.24334. The minimum reached 1.2287. This week, the high reached 1.24308, just a few pips from the range high of 1.24334. The low for the week hit 1.22992, around 12 pips below the low range.

Most notably this week, the Bank of Canada announced that it would halt bond buying, which was more aggressive than expected. Additionally, they said they expect to adjust in the middle of the two quarters of 2022 (versus the second half of 2022 previously). That is also more aggressive.

That news sent CAD higher (USDCAD lower) on Wednesday. The price moved from 1.2406 to the low of the week at 1.22992.

Price action has since seen the pair move above its 200 and 100 hourly moving averages yesterday, but the price turned lower and closed below the moving averages late in the day on Thursday.

Today, however, the general rise in the USD helped push the price back above the moving averages (200 is at 1.23558 while 100 is at 1.23713). The price has been able to stay above the 100 hour moving average of the last five hours of trading and the high has risen to 1.24069, just close to the level before the BOC decision (at 1.2406). That level was also just below the swing high dating back to October 18 at 1.24089. A downward sloping trend line is a few pips higher than that level.

Sellers had their chance Wednesday with fundamental news to support the move. Buying the dollar today has forced USDCAD sellers (CAD buyers) to buy on the technical breakout above the 200 and 100 hourly moving averages.

Moving forward and into the next week, the 100 and 200 hourly moving averages will continue to be an area defining bias. Moving below would be more bearish. Staying above it would be more optimistic.

At the top, with the pair stuck near the level just before the Bank of Canada decision at 1.2406, breaking that level would be the first step followed by an extension above the trading range since October 14 at 1.24334.

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USDCAD remains stuck in the up and down trading range

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