Daily Double Top In View For The USD/CAD
Shain Vernier • 1 min read
November has brought some great trading conditions to the USD/CAD. Active central banks and a volatile WTI market are creating consistent opportunities for currency traders. Today’s session has been more of the same ― solid action and a directional move in pricing.
During the U.S. session pre-market hours, Canadian Building Permits (MoM, Sept.) were released to the public. The number came in positive and in line with expectations, well above the previous release. New construction in Canada during the North American winter months typically lags due to inclement weather. It appears that this year developers are interested in pulling permits regardless of the season.
In addition to Canada’s Building Permits, yields of the 4-Week U.S. T-bill have grown to 2.200%. This is little surprise amid election concerns and further FED actions expected for Q4 2018.
USD/CAD Technical Outlook
At press time, it appears the USD/CAD is on pace to close in the green for the third consecutive session. Today’s rally has brought a daily Double Top (1.3170-68) formation into view.
Bottom Line: Until elected, I will be looking to sell beneath the Double Top formation at 1.3164. With an initial stop at 1.3176, this trade produces 24 pips on a 1:2 risk vs reward trade management plan.
The rest of the week is likely to be exceptionally volatile in the USD/CAD. The U.S. election, crude oil inventory cycle, and FED Interest Rate Statement are all primary market drivers that may shake things up. If you are trading Loonies, have a firm grasp on leverage as the week progresses.