breaking news USDCAD Nears Key 100-Day Moving Average: Analysis of Potential Trading Outcomes
USDCAD retests the 100-day MA
THE USDCAD
USD/CAD
USD/CAD is the currency pair comprising the United States dollar (symbol $, code USD) and the Canadian dollar of Canada (symbol $, code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed to buy one US dollar. For example, when USD/CAD is trading at 1.3500, that means 1 US dollar equals 1.35 Canadian dollars. The US dollar (USD) is the most traded currency in the world, while the Canadian dollar (CAD) is the seventh in the world.
USD/CAD is the currency pair comprising the United States dollar (symbol $, code USD) and the Canadian dollar of Canada (symbol $, code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed to buy one US dollar. For example, when USD/CAD is trading at 1.3500, that means 1 US dollar equals 1.35 Canadian dollars. The US dollar (USD) is the most traded currency in the world, while the Canadian dollar (CAD) is the seventh in the world.
Read this term recently trended lower, approaching the crucial 100-day period moving average
Moving average
A moving average is a statistical tool used to smooth short-term fluctuations in data and reveal longer-term trends. It is calculated by taking the average of a number of data points over a specific period of time and then plotting that average as a line on a graph. The most common types of moving averages are simple moving averages (SMA) and exponential moving averages (EMA). In financial markets, moving averages are often used to analyze stock prices, exchange rates, etc.
A moving average is a statistical tool used to smooth short-term fluctuations in data and reveal longer-term trends. It is calculated by taking the average of a number of data points over a specific period of time and then plotting that average as a line on a graph. The most common types of moving averages are simple moving averages (SMA) and exponential moving averages (EMA). In financial markets, moving averages are often used to analyze stock prices, exchange rates, etc.
Read this term (MA) at 1.35161. This level serves as an important indicator for buyers and sellers, with the short-term bias being slightly positive if the price remains above this point. However, a drop below the 100-day MA would indicate a shift towards a more bearish outlook.
Earlier in the day, the price briefly dipped below the 100-day MA, but failed to maintain downward momentum and then rebounded. This upward move broke through a higher swing zone between 1.3553 and 1.35597, but again the momentum faded and the sellers pushed the price back towards the 100-day MA.
The market’s next move will depend on whether the price stays above or falls below the 100-day MA. A continued decline would signal a downtrend, while breaking the swing zone between 1.3553 and 1.35597 on the upside could potentially lead to more bullish control. To solidify this latter scenario, buyers should overcome yesterday’s high at 1.3581 and the 100 hourly MA down to 1.35896.
Considering the steep decline of almost 300 pips in six trading days since last Friday’s peak at 1.38039, the market might be a bit oversold (although the trend is down). Traders looking to take advantage can look to step into the water and rely on the 100-day moving average as support with a stop below. The risk is defined and the risk is limited.
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