1.2908-1.29268 is big area to stay below The USDCAD moved up for 6 straight days as trade concerns weighed on the CAD.
Yesterday, the pair broke above a key ceiling on the daily chart above. That area was from 1.2908-268. Swing highs (see red circles) and the 50% at 1.29268 make up that ceiling area. It was broken yesterday and the price trended higher.
That move higher did have a limit. Looking at the hourly chart below the price rise stalled at a topside channel trend line (see green circles), and backed off.
Today, the high from yesterday could not be broken. Sellers started to nibble. The North Korean news and perhaps some hope tariff saber rattling passes, and NAFTA can be hammered out, all contributed to the fall (stronger CAD).
Looking at the hourly chart below, the low for the day did trade through the 100 hour MA at 1.2881 (blue line), but stalled ahead of the 38.2% at 1.2852. The price has moved back above the 100 hour MA. If the price is to go lower, that level needs to be re- broken.
On the topside, what would keep the bearish bias?
The 1.2908-268 was the old ceiling from the daily, and is reestablished as the ceiling now that the price has moved back below.
That area is the risk for traders now. I would expect sellers to show up in that area. It is kind of wide, but it is, what it is. If you like the short side, that is where traders will lean.