Daily Double Top Checks USD/CAD Rally

The USD/CAD is once again on the bull, ignoring Wednesday’s pending FOMC Minutes report. Rates are in the green by a small margin, rallying above the 1.3325 level. For the time being, it appears traders are favoring the Greenback over the Loonie, prompting a test of an important Double Top pattern on the daily chart.

Today has brought another vacant economic calendar, but there were a few smaller releases during the U.S. pre-market hours. Aside from the uptick in the Redbook Index we covered earlier, Canadian Manufacturing Shipments (MoM, June) came in at -1.2%. This figure beat expectations (-1.7%) but fell dramatically from May’s numbers (1.6%). 

USD/CAD: Technical Outlook

In a Live Market Update from yesterday, I issued a sell recommendation for the USD/CAD from just beneath the daily Double Top pattern. The play was a success, gaining 25 pips on a retracement towards 1.3300.

The current technical outlook for the USD/CAD is pretty simple: if the Double Top pattern is taken out, then we are likely in for rapid bullish break toward 1.3400-1.3450. Given the coming FOMC Minutes and weekly crude oil inventory cycle, this is a very possible scenario. 

Overview: For the USD/CAD, the current dynamic appears to be all about WTI crude and international trade. With WTI having likely already put in 2019’s yearly top, and with no resolution to the U.S./China trade war in sight, the Canadian dollar is limping. Given these two fundamentals, rates of the USD/CAD have a good chance of heading north over the intermediate-term.

ABOUT THE AUTHOR See More

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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