The USDCAD buyers took control after the higher-than-expected US employment cost index for the first quarter was released at 8:30 AM . The fundamental news and sent the price of the USDCAD above its 200-hour moving average and 100 bar moving average on the four-hour chart near 1.3700.
The price also moved above it 38.2% retracement of the recent move down from the April high at 1.37134. That retracement level will now act as close support if the buyers are to remain in full control. A move back below that level would probably disappoint the buyers.
The Federal Reserve meets tomorrow. The employment cost data certainly does not help. However, expectations may not equate to the reality of the Fedspeak. What we do know is that the market has pushed back the Fed cut expectations to September, and even then, the expectations are 50-50 for a cut at that time.
The video above outlines the key that flows for this pair going forward.
This article was written by Greg Michalowski at www.forexlive.com.
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