USD/CAD pushed to a fresh session high as a stronger US dollar and a jump in US yields lifted the pair toward the 100-day moving average. The move followed hawkish comments from Fed Chair Warsh, and the 100-day average now sits as the key level for buyers and sellers alike.
Warsh comments drive USD higher
USD/CAD extended higher, helped by a stronger US dollar and a sharp rise in US yields following Fed Chair Warsh's hawkish comments. The US two-year yield is up 11.5 basis points at 4.347%, reflecting reduced expectations for near-term Fed easing and giving the dollar's advance a fundamental catalyst.
Today's low stalled between the rising 200-hour moving average and the 100-hour moving average, at 1.38370 and 1.38599 respectively. Holding that support cluster gave buyers the room to push higher, and the price then broke above this week's previous high at 1.38970, aided by Warsh's speech.
Pair tests the 100-day average
The pair is now extending to new highs for the day and testing the August 18 and August 19 high at 1.39079. Just above that level sits the more important 100-day moving average at 1.39140.
That average is a key barometer for both sides of the trade. Getting above it — and staying above it — would strengthen the bullish bias and open the door for additional upside momentum. The next target would come near the 50% retracement at 1.39268. Beyond that sits the swing area between 1.39480 and 1.39663.
Conversely, if sellers lean against the 100-day moving average, the weekly high at 1.38970 becomes the first support level. A move back below that level would take some of the momentum away from buyers and shift the focus toward the 100-hour and 200-hour moving averages. For now, buyers are making a play, with the 100-day moving average at 1.39140 standing as the next and most important test.
Source: Investinglive
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