This week is going to be a big one for the Loonie. In addition to the regular crude oil inventories cycle, key economic events facing the U.S. and Canada are scheduled with regularity. Central banks are the primary theme, with both the FED and BoC due to drive participation to the forex. For the USD/CAD, a daily moving average resistance level is very likely to come into play.
Daily Simple Moving Average In View For The USD/CAD
It has been a positive session for the Greenback against the Loonie. Rates are on the rise for the USD/CAD as currency players evaluate the potential impacts of Powell’s testimony and the BoC’s Interest Rate Announcement.
There are two levels on my radar for the coming 24 hours:
- Resistance(1): Daily Simply Moving Average (SMA), 1.3128
- Support(1): Swing Low, 1.3037
Bottom Line: Until the Tuesday release of the API Crude Oil Stocks report, I will have sell orders in queue from 1.3124 in the USD/CAD. With an initial stop loss at 1.3152, this trade produces 25 pips on a slightly sub-1:1 risk vs reward management plan. With a bit of luck, the moving average will come into play during the upcoming U.S. overnight session.
For the Loonie, Wednesday is going to be an epic day on the economic calendar. First, the BoC is scheduled to release their Monetary Policy Report and Rate Statement; rates are expected to be held at 1.75%. Second, FED Chair Jerome Powell begins his two-day Congressional testimony ahead of the 2:00 PM EST FOMC Minutes. All of that being said, the EIA Crude Oil Stocks report is due out at 10:30 AM EST and will bring action to WTI and the Loonie.
If you are trading the USD/CAD on Wednesday, have your stops down and leverage in check!