The USDCAD currency pair has extended its upward movement, reaching a new monthly peak after an earlier attempt by sellers to establish short-term control did not materialize. Since September 8, the pair has appreciated significantly, climbing from 1.3759 to its current high of 1.4224, marking a substantial gain of 465 pips.
During the late Asian-Pacific and early European trading sessions, the USDCAD experienced a notable dip. The price initially breached a rising trendline positioned around 1.4192 and subsequently moved below its 100-hour moving average, which was then at 1.4168. This downward pressure led the pair to a session low of 1.4155.
For retail forex and CFD traders, such breaks below key technical levels like trendlines and moving averages often signal potential trend reversals or deeper pullbacks, prompting consideration of short positions. However, the market's subsequent action demonstrated the importance of confirmation.
Failed Downside Momentum
- The price failed to maintain momentum below the 100-hour moving average.
- A critical support area between 1.41297 and 1.41488 was not reached.
- Sellers quickly capitulated, leading to a swift reversal.
- The pair moved back above both the 100-hour moving average and the previously broken trendline.
The anticipated follow-through for the downside move did not materialize. Instead of continuing its descent towards the 1.41297 to 1.41488 swing area, the pair halted its decline and reversed course. This reversal saw buyers re-emerge, pushing the price back above both the 100-hour moving average and the earlier broken trendline. The subsequent hours have seen this upward momentum persist, propelling the USDCAD to new highs.
This event underscores how initial technical breakouts can sometimes fail to gain traction, leading to rapid reversals and a continuation of the prevailing trend.
📰 Based on reporting from: ForexLive →