Hi, traders; welcome to Wednesday’s update. With oil tumbling and the USD jumping, we can only think of one pair that benefits from those two moves. The USDCAD is highly driven on both fronts, and the CAD is a commodity currency that generally tracks oil’s fortunes. The USD, well yeh enough said.
Last night we saw key moves on oil and the USD. Oil shed up to 10% and briefly traded below the $100 level. The USD shot higher, the index trading above 106.50.
Looking at the daily USDCAD chart below, we can see that price continues to trade in a new fast trend after buyers took control on the 8th of June. Since then, we have seen one reaction that set up demand and an HL late in June. Buying has continued into July, with traders retesting key resistance and supply areas that have stood since May.
The recent resistance and supply lines up with a longer-term level of supply /resistance that runs back to November 2020. This is our line in the sand that buyers must break to continue the current trend. If we see a break above these levels, it could be ga,e on with 1.31 and 1.32 or higher a possibility. Fail, and we would look for a new move to possibly retest the 1.2850 area.
It’s really up to buyers and mainly USD momentum to continue to drive the current buyer move. The Fed minutes are due out today at 04:00 am AEST, and they could play a role in the current short-term USD pulse.