One highlight of the trading day for the Greenback has been its performance vs the Canadian dollar (CAD). Bullish sentiment pushed the USD/CAD higher during the early session, extending the moderate gains of Tuesday. However, this dynamic has shifted. At press time, the Loonie is selling off and returning to the 1.3025 handle.

Coming Attractions

The next two sessions are going to be pivotal for the USD/CAD. Several key economic events are scheduled and valuations are likely to move directionally. Let’s take a quick look at the primary market drivers facing this pair for the next 48 hours:

Event                                                         Country                                     Time

Housing Starts (YoY, July)                      Canada                                     8:15 AM EST, Thursday

Jobless Claims(July 27, Aug 3)               U.S.                                           8:30 AM EST, Thursday

New Housing Price Index (June)           Canada                                     8:30 AM EST, Thursday

PPI Except Food and Energy (July)        U.S.                                          8:30 AM EST, Thursday

CPI Except Food And Energy (July)       U.S.                                          8:30 AM EST, Friday

Unemployment Rate (July)                    Canada                                     8:30 AM EST, Friday

Thursday is full of secondary releases addressing the Canadian construction sector and the U.S. PPI. Friday features the primary market drivers U.S. CPI and Canadian Unemployment. Peaked volatility is highly likely, so there should be no shortage of trading opportunities in the USD/CAD.

USD/CAD Technicals

On Monday, I issued a long trade recommendation for the USD/CAD based on weekly technicals. The trade flirted with entry before reversing toward the take profit. Since then, this market has rallied more than 55 pips.

Overview: The coming news cycle is going to be supercharged. I fully expect price to either break below defined weekly support at 1.2950 or rally north of the 1.3100 handle toward yearly highs.

Today’s selloff in WTI crude is doing no favors for the Canadian dollar. If it continues, then the test of 1.2960 may set up as an intermediate-term bottom for the USD/CAD.