USDCAD remains firmly within a correction but the data set from US and Canada tonight should at least shake things up a little.

USDCAD

USDCAD continues to coil up within a corrective fashion but at this stage we cannot rule out a topping pattern. Of course any break below 1.2350 would likely signal a deeper correction (not an actual top) as the broader trend is clearly bullish across multiple higher timeframes.

Tonight we have a host of data from both US and Canada which could provide some volatility but it now becomes a question of how much direction we can expect too. As we require a divergence between the data sets to establish cleaner trends we do stand a higher chance of whipsaws and U-turns before an eventual trend becomes established, if at all.

Canada's Rate Decision is at risk of providing downwards pressure on USDCAD if rates remain on hold and I beleive this to be the likely outcome, if recent comments from Gov Poloz are anything to go by. The statement may provide extra clues as to the likelihood or timing but, at the same time, the Central Bank has not provided clear forward guidance this year.

Yellen could also bring downside pressure on USDCAD if she continues to cast doubts on the June rate hike, which I also believe to be a strong possibility (especially as we get nearer to June).

Yesterday produced a Bullish Hammer but we do have several levels of resistance between 1.252 and 1.256 which may scupper any decent rally before recycling back towards the lower end of the correction pattern.

Overall my bias for tonight's session is down towards the 1.224 lows, albeit a choppy one.

Technically Speaking

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