Monday brought an epic dump to the USD/CAD, with rates falling more than 70 pips. A bullish breakout in WTI crude oil and a weak session from the Greenback were the primary drivers of the bearish price action. Today has been a different story, as the USD/CAD has established a short-term foothold above the 1.3300 handle.
Midweek trade of the Loonie is going to be hotly contested due to the presence of several primary market drivers. The crude oil inventory cycle, U.S. CPI, and the FOMC Minutes will bring an abundance of participation toward this market. If you are trading the Loonie be prepared for periods of intense volatility in the coming 24+ hours.
USD/CAD: Technical Outlook
In a Live Market Update from yesterday, I outlined a long trading plan for the Loonie. The trade performed well, producing 25 pips profit on a bounce from the Daily Double Bottom (1.3296-7).
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Overview: Today has brought muted conditions and a tight 44 pip session range. The rejection of $65.00 posted by May WTI crude oil has put a pause to the selling of the USD/CAD. However, this may change upon release of the API Crude Oil Stocks Report later today.
From a technical standpoint, the 1.3300 level is looming large as downside support in this market. Chances are that a directional move to the bull or bear will develop from 1.3300 sometime during the Wednesday forex session.
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