Canadian Dollar Call Points:
- USD / CAD broke out at the beginning of the week, setting a fresh five-month high.
- In the last two days, however, this whole breakthrough has been erased USD/CAD return to the support / resistance key zone.
- The analysis contained in the article is based on price promotion and chart configurations. For more information on pricing operations or chart patterns, see our DailyFX education section.
So far, there has been a feast or famine week for the USD / CAD bulls, as the pair started a big breakthrough outside the main resistance zone so that only sellers could jump in there and take control again.
I had last watched the pair before the monthly opening game, and at that time the USD / CAD had just taken a support test in another key area of the chart. Resistance spread overhead, ranging from 1,2500 psychological levels to 1,2622 Fibonacci levels and had not yet come into play as buyers had avoided the 1,2500 repeat tests before the July openings.
I looked at the pair again around last week’s open, emphasizing this as an “amplified usd scenario” that can see significant strength whether the USD bulls should continue the pressure that exactly happened this week and its Monday breakthrough.
USD / CAD two-hour price table
To set the perspective for this recent breakthrough and return, the graph has taken a step backwards and things seem a little calmer, at least in some contexts. This may actually keep the door open for USD bulls, as prices are essentially pulling back for the support test in this same really large zone of 1.2500-1.2622. This zone began to play a support before the opening in 2021 and soon became a resistance in April before prices fell. It returned, as it did in July, albeit briefly, and when prices quickly returned to the region, it seems to be a test case.
Bulls, which had a low of 1.2426 last week, are in a lower position, keeping the door open for long-term USD / CAD strategies.
USD / CAD daily price chart: return to support (with prior resistance)
The chart was compiled by James Stanley; USDCAD is a tradingview
– Written James Stanley, Strategist to DailyFX.com
Get in touch and follow James Twitter: @JStanleyFX