There are two ways to read the charts in USD/CAD at the moment so I'll elaborate on both first before giving an overview and some thoughts on meshing them both together. Let's take a look at the daily chart first:
At first glance, the push to fresh highs since 15 July isn't all that impressive. We are now seeing price run up against a previous swing region around 1.3076-83 but that was broken previously on 14 July in a push towards 1.3200. The upside move was short-lived but it also sets out higher resistance region for the pair to work with in the more immediate term.
But when you look at the weekly chart:
There is more clarity here in the sense that the previous highs from May to July were all actually pinned down by the 200-week moving average (blue line). The 1.3200 mark also provides an additional layer of resistance but the price action to start the week is indubitably now more bullish as we are seeing USD/CAD trade above the key level, which is seen at 1.3026 currently.
As much as the loonie is also a decent performer in the major currencies space, the latest technical break could signal USD/CAD to come up for air amid a more meaningful technical push. Keep above the 200-week moving average and the 1.3200 level will be the next key target for buyers.
Upon that, we could be looking towards the 50.0 Fib retracement level of the swing move lower from March 2020 to May 2021 at 1.3337 as a potential area for gains to stall.
So, while the daily chart may appear unimpressive and suggests that the pair is still somewhat trading within the confines of recent price action, the weekly chart suggests a potentially stronger technical push by buyers. There's no right or wrong in reading into both but when viewing the context of price action as seen by the May to July highs, my view is that the weekly chart holds more significance so any notable price action there has more potential to be respected in that sense.
