Chart of the Day: USDCAD (four-hour chart)
USDCAD has traded and held a 1.3350-to-1.3250 range since mid-August, and we find price now testing the lower percentile of this range. Stochastic momentum has become stretched, but there’s no clear buy signal at this stage.
Should we see price rally from here, resulting in a bullish stochastic crossover, then it could give confidence this range will be respected and is due for mean reversion in price, with the 20-period average sitting midrange at 1.3295.
Of course, should we see a four-hour period close through the range low, then this could give confidence of a new bearish trend in the pair. But with the market going into tonight’s US consumer confidence print (at 00:00 AEST) expecting a weak number, then a print above consensus of 129 would likely promote a wave of USD buying, with the market pricing out any chance of a 50bp cut from the Federal Reserve in its September meeting. Will the range hold?
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