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Forex News: USDCAD above resistance. Will we see a new extension?

July 14, 2022
by Joseph Jeffriess, Market Analyst

Hi traders, today has been an exciting day with strong gains seen from the majors to the JPY. The USD made a late fightback, and we did see new weekly highs on the USD index. Risk majors, as a result, have traded lower than the USD, but for now, the EUR has not yet declined back down to parity.

The USD strength has lifted one pair to levels not seen in several months. Oil was another factor as the price failed to build on yesterday’s gains and has dropped close to 3% lower. The pair we’re talking about today is the USDCAD. The Bank of Canada raised rates by 2.5% early this morning, and that, combined with weaker oil prices and a firmer USD, helped buyers jump back into the USDCAD.

Price has hit 1.15% in gains, and the price has broken above the resistance area noted in today’s chart below.

The strong surge confirmed an ascending triangle pattern; we are now looking to the two remaining supply areas. If buyers can maintain momentum, could we see a new move back into the 1.32 Handel, a level not seen since 2020 when the market entered into its sharp bear trend that moved back to the 1.20 area.

The market has had plenty of time to charge up for this move, and it’s good to see the current breakout coming from a bullish continuation pattern. It will come down to USD momentum and oil strength to help maintain buyer drive.

USDCAD D1 Chart

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