Market Update: USDCAD starting to find resistance?

July 7, 2021
by Joseph Jeffriess, Market Analyst

Hi traders, today we’re looking at the daily USDCAD chart as sellers look to be forming a roof on recent buyer momentum.

Taking a look at the daily chart we can see a few signs that could suggest sellers are starting to turn the numbers on the short-term. A double top has stated to present after sellers re-held 1.2495 resistance.

Yesterday’s high was off the back of a sharp recovery in the USD and a sharp decline for oil yesterday. The new double top also lines up with a single point of resistance which is in line with previous support. Support becoming resistant can be a strong sign in downtrends but at the moment we’re seeing a new uptrend starting to develop.

US Dollar vs Canadian Dollar Daily chart, 7 July 2021

Daily USDCAD Chart

We will need to see sellers hold a close lower to give this resistance more confirmation. For now, risk currencies look to be fighting back after NY session losses. Oil is another factor but like risk currencies, it’s posting gains so far in today’s session.

We have Fed meeting minutes to come early tomorrow morning at 4:00 am AEST. Bullish updates could cancel the pattern and resistance if buyers can break and close above 1.2495. Bearish, and we could see sellers continue to defend from resistance.

All times are AEDT.