The USD/CAD has continued its bearish run, testing downside support just above the 1.3300 handle. One of the primary drivers of this action is the fact that WTI crude oil is holding firm above $41.00 per barrel. Given the peak fuel demands of summertime travel season, the strength in the Loonie isn’t too much of a surprise.

On the economic news front, the S&P/Case-Shiller Home Price Indices (YoY, May) has come in below expectations. Consensus estimates projected the figure to measure 4.0%; today’s number was 3.7%, well below April’s figure of 3.9%. While this is a disappointment for U.S. real estate, the number is still positive and indicative of last spring’s sweeping COVID-19 economic shutdown. 

Let’s dig into the weekly technicals for the USD/CAD and see how that key Fibonacci support level has fared.

USD/CAD Continues Its Summertime Descent

For the third straight week, the Loonie is in position to post a red candlestick. However, rates have tested and rejected a key Fibonacci support level. About a week ago, I issued a buy recommendation from the 78% weekly Fibonacci retracement. The trade performed well, producing 38 pips profit. However, it looks like the key 78% support level may be in for another test ahead of this afternoon’s API Crude Oil Stocks report.

Overview: If you’re trading the Loonie, be sure to stay abreast of the economic calendar over the next 24-hours. The weekly crude oil inventory cycle and scheduled FED Announcements are due to shake up the majors. Should there be any big surprises in either release, the USD/CAD may be poised for a directional move to the bull or bear.