USD/CAD Stalls At Daily Moving Average

For the fourth time in four sessions, the USD/CAD has traded in a rotational pattern near the 1.3150 level. Sentiment toward the Loonie is split, with seasonally strong WTI oil prices propping up valuations. Given that December WTI crude is trading above $57.00 per barrel, there is a bit more optimism than usual surrounding the USD/CAD.

In contrast to the robust oil valuations, today’s economic calendar brought the release of September’s Canadian trade balance figures. Both Imports and Exports fell month-over-month, creating a net loss of $-0.98 billion. However, there is media buzz out of the U.S. House of Representatives that a vote on USMCA may be coming sooner rather than later. Given the House’s current stance toward impeachment and a general disdain for the Trump administration, USMCA getting ratified ahead of the 2020 elections is likely a longshot.

USD/CAD Bounces From Daily SMA

Today has brought whipsaw action to the Loonie and a bounce from a key area of downside support. Earlier, rates put in a hard test of the Daily SMA at 1.3114 before reversing course. The Daily SMA is an important technical level, as this market appears poised to close the trading day in short-term bullish territory.

Here are the key levels to watch for the Loonie as we roll into this week’s inventory cycle:

• Resistance(1): Bollinger MP, 1.3182
• Support(1): Daily SMA, 1.3111

Overview: As they are every week, the Tuesday/Wednesday sessions appear ready to drive participation to the USD/CAD. Both the API and EIA stocks numbers are expected to stay in the positive in concert with fall seasonality. In the event that they do, be on the lookout for today’s gains to be extended and WTI prices to gravitate back toward the $55.00 handle.