USDCAD bulls are in trouble, testing major resistance
THE USDCAD bulls have found some decent support near the critical support level at 1.25314. Though the pair was sharply failing in the daily chart the formations of the bullish price action signal near the critical support level at 1.25314 help the optimistic dollar bulls to execute fresh long orders. Though the bulls managed to breach the major resistance level at 1.33273 the sellers eventually took control of this market.
USDCAD daily chart analysis
Figure: USDCAD testing major resistance level
From the above figure, you can clearly see the bulls have failed to break the major resistance level in the daily chart. The daily closing candle is extremely bearish and we might see some bearish in the starting of the next trading week. If the sellers take control of this market from this level, the pair will eventually head towards the next support level at 1.31186. From this level, we might see some decent bullish bounce but buying the pair without any price action confirmation signal will be an immature act. On the contrary, a clear break of the price below the major support level at 1.31186 on a daily closing basis will refuel the sellers in the market. This will eventually lead this pair towards the next support level at 1.29040. This is the most important level for the buyers since we have plenty of supportive candles down below this level.
USDCAD daily chart analysis
Figure: USDCAD testing weekly support level
In the weekly chart, the pair is currently testing a major resistance level. The pair had formed a nice bearish pin bar in the weekly chart and if the sellers manage to break below the low of last week candle, we might see some extensive bearish rally. However, the sellers will have to clear out the 100 and 200 weekly support level to establish strong bullish momentum in the global market. A weekly closing of the price below the 200 weekly support level will confirm the end of the current bearish rally and this will eventually lead this pair towards the next major support level at 1.20420.
On the upside we need to break above the major resistance level at 1.37714, to establish fresh buying momentum. A weekly closing above the price above that resistance level will eventually lead this pair towards 1.46920. Fundamentally the recent performance of the U.S economy is doing relatively well and we might see some further bullish movement. On the contrary, the ongoing crisis regarding oil cap decision by OPEC is also weakening the Canadian economy. If the energy sectors manage to stabilize in the upcoming week, the Canadian dollar bulls will strongly take control of this market which will eventually push the USDCAD pair lower.
In the daily chart, the market is slightly bearish since we have a bearish closing candle in the last trading week. When it comes to the weekly chart analysis, the pair is testing major resistance level. Considering all the parameters, it’s better to stay in the sideline until we get a clear signal.