USD/CAD Rallies, Macro Resistance In View
Shain Vernier • 1 min read
Today’s action across the forex has been supercharged. In the wake of FED and ECB announcements, heavy participation is the rule. As a result, the USD is on the march against the majors. Big gains against the Euro, British pound, and Swiss franc have highlighted the U.S. session.
Commodity pricing has also been strong, led by WTI crude gaining 40 cents per barrel in the early going. The rally in oil pricing has helped the Canadian dollar hang in there against the USD. Two-way action has been considerable at the 1.3000 level.
With four rate hikes being on the agenda for this year and a budding trade war with the U.S., one has to wonder how long the Loonie can hold its value against the Greenback. Let’s dig into the daily technicals and take the pulse of this market.
At some point, the USD/CAD will leave the 1.3000 handle. In the event that it occurs today, a short from near the Swing High will provide a nice entry to the bear.
Here are the support and resistance levels for the remainder of the session:
- Resistance(1): Swing High, 1.3067
- Support(1): Bollinger MP, 1.2915
- Support(2): Daily SMA, 1.2897
Bottom Line: Currently, this market is in heavy rotation on the daily timeframe. With the strong U.S. Retail Sales numbers released earlier, a bullish intraday trend north of 1.3000 is a possibility.
For the remainder of the trading week, sells from 1.3049 are a good way to play a rotational USD/CAD. With an initial stop at 1.3076, this trade yields 27 pips on a retrace toward the 1.3000 handle using a 1:1 risk vs reward management plan.
As always, trade smart and keep your leverage in check!