It has been an interesting open to the trading week. U.S. indices are heavily in the red and the forex is showing many range-bound markets. As of now, it appears that currency traders have taken an extended Easter holiday. There is considerable action on the WTI crude oil front, with price falling almost $1 dollar per barrel during early trade.

The USD/CAD is in the midst of a consolidation pattern on the daily timeframe. This has been the norm for the past several sessions, with traders taking a non-committal stance toward the Loonie.

USD/CAD Technicals

No doubt about it, tight markets are difficult to trade. The good news is that they don’t stay compressed forever — rest assured that a breakout is coming.

As of press time, the USD/CAD is trading firmly inside of Friday’s extremes. A modest 35 pip range has been the extent of the action thus far in the session. Here are the levels to watch for the rest of today:

• Support(1): Bollinger MP, 1.2871
• Resistance(1): Daily SMA, 1.2959

Overview: The psychological level of 1.2900 is highly likely to generate two-way action during today’s session. With no primary market movers scheduled facing this pair, the weekly crude oil inventory cycle is likely to carry a bit more weight than usual.

I will be expecting things to pick up for the Loonie on tomorrow’s API crude oil stocks release. Until then, it may be best to sit back and watch how the market unfolds during this post-holiday session.