USD/CAD Breaks Out, Tests 1.3200 - Forex News by FX Leaders
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USD/CAD Breaks Out, Tests 1.3200

Posted Wednesday, February 6, 2019 by
Shain Vernier • 1 min read

In a Live Market Update from yesterday, it was discussed how the weekly crude oil inventories cycle may boost the USD/CAD to a test of 1.3200. This scenario has come to pass and rates have posted an intrasession high of 1.3208. At the moment, the USD is in position to extend the winning streak vs the Loonie to three sessions.

Earlier, the EIA Crude Oil Stocks report was released to the public. Recently, the seasonal trend of increasing supply has been the norm, featuring growth in stocks. This week’s EIA figures fell in line with the trend, posting a surplus of 1.263 million barrels. The report came on the heels of Tuesday’s API stocks release, which also reported a strong build of 2.514 million barrels. All in all, these numbers eclipsed expectations.

USD/CAD: Technical Outlook

In the half-hour following release of the EIA number, March WTI crude oil futures rallied north of $54.14. The price action in WTI has helped the Canadian dollar a bit, prompting a short-term reversal in the USD/CAD.

USD/CAD, Daily Chart
USD/CAD, Daily Chart

For the near future, there will be two levels of topside resistance on my radar:

  • Resistance(1): Daily SMA, 1.3227
  • Resistance(2): Bollinger MP, 1.3252

Bottom Line: Until elected, I will have sell orders in the queue from 1.3224. With an initial stop at 1.3259, this trade produces 25 pips using a standard 1:1 risk vs reward management plan.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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