The “risk on” sentiment is helping to push the USDCAD lower.

The major US indices have now erased their Friday declines. The Dow industrial average is up near 600 points. The NASDAQ index is up over 3% or +316 points.

Looking at the USDCAD, the pair in the London morning session tested 100 hour moving average at 1.3803. After a corrective move higher, took the price back toward resistance near 1.3875, the sellers reentered and have been able to extend below the 100 hour moving average (and 30.2% retracement of the move up from the October low (at 1.37957).

The price has since moved below the 200 hour moving average 1.37539 and looks toward the swing lows from last week near 1.3701. The low price just reached 1.37135 and bounced back toward 1.3733.

What next?

With the price moving below the the hourly moving averages, sellers will now be looking to lean against those levels with close risk now being the 200 hour moving average 1.37539. Stay below that moving average keeps the sellers more in control. In addition to the support at 1.3701, the 61.8% retracement of the October trading range at 1.36836 followed by a swing area between 1.3637 and 1.3666 would be the next downside targets.