The USD/CAD is in a holding pattern ahead of the Bank of Canada (BoC) Governor Stephen Poloz speech at 11:00 AM EST. Yesterday’s BoC Announcements did not do the Loonie any favors. The BoC cited lagging GDP and a potential disruption to U.S./Canada trade as being the reasons for holding rates steady. The tone was ominous to say the least.

To add more fuel to the fire, WTI crude oil experienced heavy selling. While the fundamentals were not working in the USD/CAD’s favor, the Loonie held tough. After an early run to 1.3000, the Loonie closed losing only 25 pips. Not too bad of a showing considering the brutal news cycle.

USD/CAD Technicals

To rehash Wednesday’s update on the CAD, 1.3000 is the 5000-pound elephant in the room. Price has rejected this area on three separate occasions — you can bet that there are a bulk of stop out orders resting from 1.3001 to 1.3010.

Here are the levels to watch for the today’s U.S. session:

• Resistance(1): Psyche Level, 1.3000
• Support(1): Bollinger MP, 1.2715
• Support(2): Daily SMA, 1.2602

Bottom Line: Poloz’s speech is due out in the coming minutes. I expect a brighter outlook on the Canadian economy, at least more so than yesterday’s BoC Statements. Buckle up, a directional move is possible.

For today, I will be playing a breakout long from 1.3001. This trade is a true scalp, looking for 8-12 pips. The stop loss is a tight 10 pips, with the goal being immediate and definitive price action. If the there is no one home at 1.3001, then make a hasty exit!