USD/CAD Breaks Out, Tests 1.3200
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.
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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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