It's all about the black stuff
Major central bank meetings always heighten price risk. While we're not expecting any action from the BOC today, nor any big message shocks from Poloz, so the loonie could well snooze through the event
Meanwhile, the oil market is where the bigger volatility is right now and with a lot of specs thinking they've nabbed the bottom, the inventory data has become bigger news than usual. In normal times, probably 9 out of 10 releases have a limited affect on prices and that's usually finished after 10-20 minutes. Now, there's a whole bunch of longs who just need an excuse to push the price further in their favour. If they get that chance then we could get a rip that will take the CAD with it. On the flip side they could get a spanking from a much bigger than expected build.
The API data showed a 4.4m build last night so that has helped torpedo some of the bullish sentiment. The DOE data is expected to show a build of around 3.5-3.8m, depending on who you look at.
WTI has found old resistance again at 38.40 and faces some strong tech levels around $40
WTI daily chart
Greg's noted that USDCAD is still bouncing around inside the recent ranges and it's no surprise to me to see that the high is just below an area I've noted previously around 1.3450/70. Just watch oil if it becomes the main driver.
