The weekly U.S. oil inventory cycle is in and reports are mixed. Earlier this morning, the EIA Crude Oil Stocks Report showed a -0.876 million barrel draw. Today’s EIA figure came on the heels of Tuesday’s API Crude Oil Stocks Report of a 3.910 million barrel supply build. The conflicting numbers have led to an intrasession consolidation pattern in May WTI crude oil just above $60.00. Subsequently, the USD/CAD has posted a significant forex session loss of -0.42%.

In addition to the EIA report, the Wednesday economic calendar featured several interesting events. Here’s a look at the highlights:

Event                                                              Actual                      Projected            Previous

MBA 30-Year Mortgage Rate                        3.33%                           NA                      3.36%

ADP Employment Change                            517K                             550K                    117K

Chicago PMI                                                     66.3                              60.7                     59.5

Pending Home Sales (MoM)                       -10.6%                          -2.6%                  -2.8%

In short, mortgage rates are down, as are Pending Home Sales. However, U.S. home supplies are very lean right now and are the primary driver of February’s downturn. On the employment front, the ADP Employment Change came in well above the previous release. While this figure missed projections, it does signal that the private sector is actively hiring workers. All in all, this group suggests that the American COVID-19 recovery is progressing well.

Let’s dig into the USD/CAD and take a look at the intermediate-term technical picture.

USD/CAD: Weekly Outlook

At press time (about 2:00 PM EST), the USD/CAD is trading near the 1.2575 quarter-handle. Intraday participation has been bearish, paring weekly gains.

Here are two levels worth watching until Friday’s closing bell:

• Resistance(1): Weekly SMA, 1.2659
• Support(1): 2021 Low, 1.2356

Bottom Line: If we see a late-week surge in the USD/CAD, a short trade may set up nicely. Until Friday’s close, I’ll have sell orders in the queue from 1.2657. With an initial stop loss at 1.2679, this trade produces 22 pips on a standard 1:1 risk vs reward ratio.