It has been a relatively quiet open to the trading week on the U.S. markets. Equities are hovering very near flat, with commodity pricing showing bearish tendencies. For the moment, one of the biggest movers on the forex has been the USD/CAD. Rates have gapped down, falling beneath the 1.3100 handle.

Today’s action in the USD/CAD has come as a bit of a surprise. WTI crude oil continues to trade near the $53.50 handle, with very few market drivers populating the economic calendar. However, the Tuesday session is likely to shake things up for the Loonie. Canadian Retail Sales (MoM, August) is scheduled for release during the pre-market hours. Analysts are expecting the figure to come in unchanged at 0.4%; in the event this figure disappoints projections, we may see a swift recovery from today’s plunge.

USD/CAD Opens Week GAP Down

The Loonie is currently posting multiple month lows. Subsequently, there aren’t a whole lot of support levels to hang our hats on. Perhaps the next value area to be challenged will be last July’s low at 1.3015.

Overview: For now, a bearish bias is warranted for the USD/CAD. Rates are in a relative freefall and are showing no signs of retracement. It is an obvious point, but one is well advised to favor the short side of this market.

No doubt about it, tomorrow is going to be a key session for the USD/CAD. Canadian Retail Sales and the API Crude Oil Stocks report are poised to drive participation to the Loonie. If we see some surprises in these figures, a rally is possible; if not, it looks like the next psychological level up for scrutiny is 1.3000.