In an update from a bit earlier, I outlined today’s action in the crude oil market. A moderate bullish bounce on the open is being challenged, with price threatening the $66.50 level. In close relation to the recent strife in the WTI market, a strong uptrend for the USD/CAD has been on display for over a week. The result has been the USD/CAD eclipsing the 1.3000 level.

Wednesday’s session will be an important one for the forex, but specifically as it pertains to the USD/CAD. The release of U.S. GDP and the Bank of Canada (BoC) Interest rate decision will determine the direction of the Loonie for the near-term. The BoC is expected to hold rates steady at 1.25% and U.S. GDP (Q1, Annualized) is also predicted to stay the same at 2.3%.

Of course, surprises are possible. Robust U.S. GDP is a possibility, but it is highly improbable that the BoC is going to raise rates. No doubt, the next 24 hours are going to be big for the USD/CAD.

USD/CAD Technicals

Aside from the coming news cycle, the picture facing the Loonie is relatively simple. As long as crude oil continues to dive, the USD/CAD is poised to rally.

Here are several levels to watch as the forex session continues to unfold:

• Resistance(1): Psyche Level, 1.3050
• Support(1): Psyche Level, 1.3000

Overview: Robust daily ranges have been the rule for the USD/CAD for the last six sessions. Participation is high in correlation with the strong action in the crude oil markets. At press time, price is trading just above the 1.3000 handle, near 1.3020.

Going into tomorrow’s economic releases, I expect price to rotate between 1.3000 and 1.3050. It is not uncommon for traders to behave in a noncommittal fashion going into the release of fundamental market drivers. Expect compressed market conditions as tomorrow’s events approach.