It has been a whipsaw session for the USD/CAD. Earlier, rates traded outside of Wednesday’s extremes before consolidating in the 1.3300 area. In addition, October WTI crude oil futures have broken out to the bull and are driving toward $57.00. If the strength in WTI continues, one is inclined to think that the USD/CAD will be in for a bearish late-week move.

This morning’s relatively stable U.S. Q2 GDP report has largely offset an impressive reduction in Canada’s Current Account (Q2) deficit. Canada’s Current Account (Q2) figures fell from -16.63 billion in Q1 2019 to -6.38 billion for Q2. This is a substantial gain and one that suggests Friday’s Canadian GDP (Q2) release may come in stronger than expected.

If we see Canadian GDP outperform expectations and WTI crude continues to rally, a considerable sell-off in the USD/CAD may be in the cards. By this time tomorrow, we may be looking at a very different Loonie.

USD/CAD: Technical Outlook

Since early July, the Greenback has posted consistent gains against the CAD. For the time being, the bullish daily trend in the USD/CAD remains valid.

Here are two levels to watch going into Friday’s supercharged news cycle:

• Resistance(1): Double Top, 1.3344-1.3339
• Support(1): Daily SMA, 1.3289

Overview: At press time (12:10 PM EST), October WTI crude futures are pushing intraday highs near $56.75. If we see a positive close above $57.00, then the USD/CAD will be likely to fall beneath downside support. If this scenario plays out, be prepared for a bearish break toward 1.3250 ahead of Friday’s Canadian Q2 GDP release.