USD/CAD Breaks Out To The Bull
Even with May WTI crude oil futures trading above the $60.00 level, the Greenback is rallying versus the CAD.
The USD is gaining ground across the majors in the wake of Wednesday’s FED Interest Rate Decision. One of the biggest movers has been the USD/CAD, putting in a rally of more than 75 pips. Given the recent strength of WTI crude oil pricing, the bullish breakout above 1.3350 comes as a bit of a surprise.
For the Canadian dollar, the next 24 hours are going to be pivotal. Friday’s U.S. pre-market period brings release of the BoC CPI (Feb.) and Canadian Retail Sales (Jan.). Analysts expect the BoC CPI to slide to 1.2% and Retail Sales to come in stronger at 0.4%. If these numbers perform well, a possible resurgence in the Loonie is possible. If not, the USD/CAD is likely to test an established Double Top formation on the daily chart.
USD/CAD: Technical Outlook
Even with May WTI crude oil futures hanging above $60.00, the Greenback is rallying versus the CAD. Although the bullish pressure may be short-lived, topside resistance is on the horizon.
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Until Friday’s closing bell, the daily Double Top pattern at 1.3466 and 1.3467 will be an area to watch. At press time (1:00 PM EST), rates are just about 70 pips south of this level. In the event Friday’s Canadian economic numbers come in soft, a test of the Double Top is possible.
Bottom Line: Until elected, I will have sell orders queued up from 1.3459. With an initial stop at 1.3784, this trade produces 25 pips on a standard 1:1 risk vs reward management plan.
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