After Tuesday’s breakout and test of $60.00, February WTI Crude oil futures have pared gains during today’s session. The bearish price action in oil has not phased the USD/CAD, as the Loonie continues to show strength against the Greenback.

For a majority of the session, February WTI crude oil has traded near the $59.50 level. Volumes have been substantial for a U.S. session during a holiday week, with over 300,000 contracts changing hands. The recent bull run in crude oil has been a welcomed sight to the CAD, as values against USD have been on a tear over the last seven trading sessions.

USD/CAD Technical Outlook

The USD/CAD has fallen out of bed on the daily chart. The bears are in full control, with price nearing a key support level.

For now, this market is trending south far beneath topside resistance levels. Downside macro support is on the horizon with the 38% Fibonacci retracement of the Sept. low/ Dec. high (1.2591) coming into view.

As of this writing, price is rotating between the intraday low of 1.2626 and 1.2640. In the event that we see a solid break by WTI crude above $60.00 on tomorrow’s EIA inventory report, downside support at 1.2591 is likely to come into play. Stay tuned for ideas on how to profit from the action.

Upcoming Events

After a slow Tuesday, the economic calendar is heating up a bit. Here are the important events to watch during the next 24 hours:

Country                            Event

Japan                               Foreign investment, Retail Trade

U.K.                                  BBA Mortgage Approvals

U.S.                                  Continuing Jobless Claims, EIA Crude Oil Stocks

Tomorrow’s EIA crude oil stocks report is released shortly after the EIA natural gas storage number. This confluence of reports is somewhat rare. If you are trading oil during this time period, be aware of the potential impact of both reports hitting the wires within 30 minutes of one another. Markets are likely to be thin, thus the impact of a surprising number could be magnified.

Until then, trade smart and for tomorrow!