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USDCAD Setting Up for a New Push Higher?

August 24, 2022
by Joseph Jeffriess, Market Analyst

Thanks for stopping by for today’s update. Our focus is on the USDCAD as buyers look to be finding new support after last week’s range breakout.

The USD has been up, and about recently, we saw the USD index hit 109 yesterday, testing July high. Buyer momentum was short-lived as sellers took control in the NY session, sending the price to a lower close, the first in seven sessions.

The USDCAD had shared in the recent bullish momentum, hitting 1.3063 yesterday before the USD lost upward traction and oil made a solid rally. Oil is a big factor for this pair, and typically when it’s stronger, the CAD is firmer, so the USDCAD can trade lower.

Last week as the USD made its charge, we saw the USDCAD break above its range at 1.2930. From that point, the price continued to rally for four sessions. Yesterday was the first decline since the breakout, and it was a decent one (-0.82%). Price today has seen demand, and we are seeing higher prices that have found support from the previous breakout point, also maintaining the current uptrend.

These are bullish signs, but we need to see yesterday’s low hold. If we do, we will continue to look for the current trend to continue higher. But, if we see a new decline that breaks below the green box (shown on the chart), we could be looking at a deeper lower reaction, which could also confirm a trend break.

Pressure is now on buyers to hold today’s rally and continue to trade above 1.2935.

Thanks for reading today’s update. We hope you enjoy the rest of your Wednesday.

USDCAD D1 Chart

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