USD/CAD In Rotation Near 1.3300 - Forex News by FX Leaders

USD/CAD In Rotation Near 1.3300

Posted Thursday, August 29, 2019 by
Shain Vernier • 1 min read

It has been a whipsaw session for the USD/CAD. Earlier, rates traded outside of Wednesday’s extremes before consolidating in the 1.3300 area. In addition, October WTI crude oil futures have broken out to the bull and are driving toward $57.00. If the strength in WTI continues, one is inclined to think that the USD/CAD will be in for a bearish late-week move.

This morning’s relatively stable U.S. Q2 GDP report has largely offset an impressive reduction in Canada’s Current Account (Q2) deficit. Canada’s Current Account (Q2) figures fell from -16.63 billion in Q1 2019 to -6.38 billion for Q2. This is a substantial gain and one that suggests Friday’s Canadian GDP (Q2) release may come in stronger than expected.

If we see Canadian GDP outperform expectations and WTI crude continues to rally, a considerable sell-off in the USD/CAD may be in the cards. By this time tomorrow, we may be looking at a very different Loonie.

USD/CAD: Technical Outlook

Since early July, the Greenback has posted consistent gains against the CAD. For the time being, the bullish daily trend in the USD/CAD remains valid.

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

Here are two levels to watch going into Friday’s supercharged news cycle:

  • Resistance(1): Double Top, 1.3344-1.3339
  • Support(1): Daily SMA, 1.3289

Overview: At press time (12:10 PM EST), October WTI crude futures are pushing intraday highs near $56.75. If we see a positive close above $57.00, then the USD/CAD will be likely to fall beneath downside support. If this scenario plays out, be prepared for a bearish break toward 1.3250 ahead of Friday’s Canadian Q2 GDP release.

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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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