What’s Happening? USDCAD could be active over the next day or so with a number of forces in play led by tomorrow’s Bank of Canada decision, but also swings in the oil price and in USD around Fed interest rate speculation. Technicals: After a big round trip up in late 2015 and back down in early 2016, USD CAD has settled into a big $1.2650 to $1.3250 trading range. RSI bouncing around 40 and 60 over this time confirms sideways momentum. Recently signals have been a bit mixed. A trend of higher lows indicates a weakening CAD, but a lower high last week and USDCAD falling back under the big $1.3000 level (where a round number and Fibonacci level cluster with the 50-day average) suggests a strengthening CAD. How the pair acts around $1.2800 trend support may settle the score. Fundamentals: The loonie could be active over the next day or so around the Bank of Canada interest rate decision. While the central bank appears likely to keep rates steady while it waits to see that the full impact of the Fort McMurray wildfires on the economy has been, the central bank of other big resource exporting countries like Australia and New Zealand have been cutting rates this summer. Last night, the RBA held rates steady, reducing some of the outside pressure on the Bank of Canada to cut interest rates for now. The Bank’s statement may attract particular attention from traders this time out looking for signs of whether the Canadian economy has rebounded into the summer has expected and if a rate cut later in the year remains a possibility or not. There are other forces that may also influence trading in CAD this week. For most of the last year, USDCAD has been impacted by two main forces. The first is the oil price which collapsed in 2015 but has been recovering since bottoming out in February. WTI appears to be stabilizing into a $40-$50 trading range. Speculation surrounding whether Saudi Arabia, Iran and Russia could lead some sort of agreement among big producers to stabilize the oil market ahead of a big energy conference in Algeria at the end of this month could keep oil prices hopping. The value of CAD relative to USD may also spark moves in the CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.