At 2:30 PM EST today Bank of Canada (BoC) Governor Stephen Poloz is scheduled to speak on matters relevant to the Canadian economy. Traders and investors will be watching intently as whipsaw trading conditions have defined the Tuesday session in the USD/CAD.

Earlier, the Canadian GDP report was released to the public. The hard number came in at 0.4%, slightly above estimates (0.3%) and up significantly from the previous release (-0.1%). A moderately positive GDP report has had little influence on the Loonie, with initial bearish price action giving way to a test of the 1.2900 level.

Since then, bears have checked this market hard. Amid a selloff in WTI crude oil, the intraday top of 1.2913 has stood tall. Let’s dig into the technicals and see where this market may be headed in anticipation of this week’s WTI inventory cycle.

USD/CAD Technicals

Yesterday, I talked a little about the impact that a negative or flat GDP release was likely to have on this market. While GDP came in pretty close to flat, the key driver of the USD/CAD is today’s activity on the WTI crude oil markets.

For the third time in five sessions, price has rejected the 1.2900 handle. Perhaps a fourth time will be the charm? There are only two levels on my radar until this week’s oil inventory cycle is completed:

• Resistance(1): Psyche Level, 1.2900
• Support(1): 38% Retracement of Current Wave, 1.2765

Bottom Line: If today’s intrasession high of 1.2913 holds up, we could be in for a bullish breakout above this level for Wednesday’s session. However, while the daily technicals are supportive of a near-term bullish bias, the USD/CAD is in a heavy consolidation phase. Timing a breakout properly may prove problematic amid choppy trading conditions.

I have buy orders queued up from 1.2775 with an initial stop of 1.2749. If we see a retracement from current levels, the long will be good for 25+ pips to the topside.