Here are all the details, and 5 possible outcomes for USD/CAD.
Published on Wednesday at 14:30 GMT.
Indicator Background
As Canada is a major oil producer, the Canadian dollar often mimics the movement of oil prices and improves when oil prices rise. Traders should pay close attention to this indicator, as an unexpected reading can have a strong impact on the movement of USD/CAD.
Crude Oil Inventories declined 0.9 million last week, surprising the markets which had expected a small gain of 0.3 million. This marked a fourth straight decline. Another decline is expected in the upcoming release, with an estimate of -1.9 million.
Sentiments and levels
The Fed stayed on the sidelines last week, and we may not see a rate hike before September. Canadian numbers have been solid, and US numbers appear to have recovered after the dismal Nonfarm Payrolls report. We could see volatility during the week ahead of the Brexit vote on Thursday. So, the overall sentiment is neutral on USD/CAD towards this release.
Technical levels, from top to bottom: 1.2990, 1.29, 1.2780, 1.2663, 1.2538 and 1.2459.
5 Scenarios
- Within expectations: -2.5M to -1.3M. In such a scenario, USD/CAD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: -1.3M to -0.7M: An unexpected higher reading can send the pair below above one support line.
- Well above expectations: Above -0.7M: A small decline or a surplus could push USD/CAD below two support lines.
- Below expectations: -3.2M to -2.6M: A weaker reading than expected could cause the pair to break above on resistance line.
- Well below expectations: Below -3.2M. In this scenario, USD/CAD could break above a second resistance line
