Home USD/CAD: Trading the US Crude Oil Inventories

USD/CAD: Trading the US Crude Oil Inventories

US Crude Oil Inventories measures the change in the number of barrels held in inventory.  The report is published each week. A reading which is higher than the market forecast is bullish for USD/CAD.

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 is sensitive to US Crude Inventories. Traders should pay  close attention to  this indicator, as an unexpected reading can  have a strong  impact on  the movement of USD/CAD.

Crude Inventories jumped 2.8 million last week, well above the estimate of 0.6 million. The surplus for the upcoming release is expected to shrink to 0.50 million.

Sentiments and levels

The Canadian dollar posted sharp losses last week and  remains under pressure, close to the symbolic 1.30 level. However, the US  NFP was very weak  and it’s unclear whether the Fed will raise rates in June. So, the overall sentiment is  neutral on USD/CAD towards this release.

Technical levels, from top to bottom: 1.3219, 1.3081, 1.2990, 1.29 and 1.2780 and 1.2646.

5 Scenarios

  1. Within expectations:  0.2M to 0.8M. In such a scenario, USD/CAD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 0.9M to 1.4M: An unexpected higher reading can send  the pair  below  above one  resistance line.
  3. Well above expectations: Above 1.4M:  A much higher surplus than expected  would likely push  USD/CAD higher, and a second  resistance line  might be broken as a result.
  4. Below expectations: -0.4M to 0.1M:  A  weaker reading than expected could cause  the  pair to break below one support level.
  5. Well below expectations:  Below -0.4M. In this scenario, USD/CAD could break  below a second  support level.

For more on the loonie, see the USD/CAD forecast.

Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.