Aside from big gains for American stocks, the story of the day has been the action in commodities. For GOLD, it has been a bullish session, with prices rallying in the neighborhood of $45.00 per ounce. The opposite has been true for WTI crude oil, which has reversed the fortunes of the past two green sessions. Despite the recent strength in oil pricing, the USD/CAD continues to hold within intermediate-term bullish territory.

The global oil dynamic has undergone a seismic shift since last Thursday. At the time, most analysts were calling for single-digit pricing due to a glut of supply and lacking storage. Now, talks of a Russia/Saudi deal and U.S. tariffs on oil imports have energy bulls bidding May WTI crude from $25.00. Although the picture is still very murky, it appears that some investors are excited about a late-spring recovery in crude oil.

Unfortunately, the COVID-19 economic fallout has greatly impacted sentiment toward the Canadian economy and the Loonie. While a rally in oil is good for the CAD, it appears that currency players aren’t ready to sell their Greenbacks. Let’s dig into the technicals and see where the USD/CAD may be headed in the short-term.

USD/CAD Technical Outlook

For the time being, the Loonie is in a non-committal technical area. However, the daily ranges remain wide and are ripe for a rotational trade or two.

Here are the levels to watch as we move into this week’s crude oil inventory cycle:

• Resistance(1): Daily SMA, 1.4250
• Support(1): Bollinger MP, 1.4027

Bottom Line: In the event we see the USD/CAD extend today’s losses, a buying opportunity may come into play. Until tomorrow’s API Crude Oil Stocks Report, I will have buy orders in queue from 1.4027. With an initial stop loss at 1.3994, this trade yields 30 pips on a sub-1:1 risk vs reward ratio.