USDCAD consolidates at the bottom. Let’s the moving average play catch up to the price.
Like most of the currency pairs today, the NY time frame has had some consolidation period. The USDCAD has been pressured today on the back of the lower dollar, higher oil and some speculation of potential takeover of RIMM. If that is the case, there would be a underlying bid for CAD$ (i.e. USDCAD selling).
The consolidation has allowed the 100 bar MA on the 5 minute chart to play some catch up with the current price. Note, however, that the catch up has not been because of the USDCAD moving higher, but more so because the price has stopped the decline. This may keep more of a bearish bias for the pair.
Either way. if the price and moving average converge, the market tends to make a decision. Will it correct higher to the upside (200 bar MA - green line and 1.0639 as possible upside targets), or continue the move to the downside where a break of the the floor at 1.0553 would look to target the 1.0537 level next (midpoint of the move up from the October 15th low), then 1.0459 (61.8% on the chart below).
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