The EURCAD pair is being held down by an arc of resistance, mainly based on its daily time frame moving averages and the area of resistance that they have formed. Price action has pushed back above 1.5000 today and its 50 DMA at 1.5027 to find resistance at 1.5050. Support can be seen around today’s low at 1.4977. A loss of this area may be the result of sellers using the resistance to drive price lower and target the support at 1.4850. Below this area support was found last month at 1.4761 ahead of the 1.4750 level.
Resistance is now in play at the 1.5100 level which is where the 100 DMA is currently positioned. A loss of this area and a push higher may encounter the high from last month at 1.5132 followed by the falling resistance trend line at 1.5185. This trend line has moved under 1.5200 and with the 200 DMA moving lower at 1.5275 a break out of this area potentially opens the path for advances beyond 1.5300. The September high at 1.5371 is a primary target, with an extended rally higher looking to target the June high at 1.5589.
The Mid-term elections in the US have seen the House taken over by the Democrats and this creates a divided congress as Republicans retain control in the Senate. The US Dollar has come under pressure as the result came in and is down against the major currencies. The chart shows a slip lower for the USDCNH pair to test support at 6.9100. The 200 period moving average was providing support at 6.9183 but this level was broken. The 6.8900 is potentially the next area of support followed by the November lows at 6.8530. A loss of this level may result in a fall in price to 6.8250 and the late September low.
Resistance may now start to gather around 6.9200 with a move past this area suggesting a reversal of the initial selling experience in the pair. The 6.9400 level is catching the eye of many chartists today as the 100 and 50 period 4 hour moving averages are both at that level. The 100 period MA at this level halted the overnight push higher and created a lower high there. This level will now be key to an advance towards 7.0000. Before that level resistance has formed at 6.9800 to start the month and this is the last major resistance on the chart before the round number of 7.0000.