Double Top In View For The USD/CAD
One of the bright spots for the Greenback on today’s forex has been its performance against the Canadian dollar. The USD/CAD has put in a solid session to the bull, eclipsing the 1.3300 handle. If bids continue to hit the market, a daily Double Top pattern may come into play ahead of the closing bell.
The driver of the move in the Loonie is a bit of a mystery. WTI crude oil has held its own in the neighborhood of $55.00 and trade war optimism has dominated equities sentiment. No matter the underpinnings, the USD/CAD is one of the few live pairs on the forex and is attracting solid participation.
USD/CAD Drives Toward Daily Double Top
Since an early session rejection of downside support, the bulls have been in control of the USD/CAD. Rates are on the move north of 1.3310 and are in a position to extend daily gains.
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Here is the key level to watch during the coming late-session action:
- Resistance(1): Daily Double Top, 1.3344-1.3339
Bottom Line: If we see the USD/CAD extend its intraday range to the north, a selling opportunity may set up from topside resistance. Until elected, I will have sell orders in the queue from 1.3335. With an initial stop loss at 1.3356, this trade produces 25 pips on a better-than-1:1 risk vs reward ratio.
Looking ahead, the coming 48 hours are going to be key for the Loonie. Weekly crude oil inventories will begin tomorrow and the Bank of Canada (BoC) Core CPI, as well as the FOMC Minutes, will hit the wires Wednesday. In addition, the Jackson Hole Symposium is scheduled to kick off Wednesday evening. Given these fundamental events, be on the lookout for an active USD/CAD throughout the trading week.
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