Overnight Range 1.3024-1.3078
US Jobless claims were close enough to expectations that they had little impact on FX trading. The same was true for Canada New Housing Price Index. FX markets are reluctant to stray to far from current levels ahead of tomorrow’s Eurozone GDP data and US Retail Sales report. The exception is Sterling which hit a low of 1.2935 overnight and is currently hovering around 1.2975. On-going bearish sentiment from expected Brexit fall-out is weighing on the currency.
The Reserve Bank of New Zealand got the overnight session started off with a bang. No one should have been surprised by the announcement of a 0.25 bp. cut in the Official Cash Rate (OCR) and they weren’t. What was surprising was the Kiwi reaction. NZDUSD dipped to 0.7163 immediately following the announcement and then screamed higher to 0.7342. It has declined steadily ever since and currently sits at 0.7248. That is because the RBNZ Assistant Governor John McDermott said that the risk of the OCR “falling below 1.5% is very high”. The OCR is currently at 2.0%. Still, it is a tad strange to see the currency hang on to gains when additional easing is expected.
Elsewhere, Japan was closed for Mountain Day. AUDUSD bounced higher following the Kiwi news but drifted lower in Europe. EURUSD failed to add to yesterday’s gains in Asia and drifted lower throughout the European session. USDJPY is back in the middle of its narrow 101.00-101.50 range.
WTI oil prices have bounced off the overnight low of $41.07 but are still below the intraday downtrend line at $41.80 and pressure by yesterday’s news of record Saudi output.
USDCAD technical outlook.
The intraday USDCAD technicals are the same as yesterday; bearish while trading below 1.3070 and looking for a break below support in the 1.2980 (55 day moving average) –1.3000 area to extend losses to 1.2940, the 100 day moving average. The USDCAD uptrend from the middle of June remains intact while prices are above 1.2990 and it is guarding the uptrend line from May 2, which comes into play at 1.2870. A break above 1.3080 will extend gains to 1.3150. For today, USDCAD support is at 1.2980 and 1.2940. Resistance is at 1.3080 and 1.3120
Today’s Range 1.3020-1.3090