USDCAD Overnight Range 1.2703-1.2797
The Canadian dollar is at a nine month high, basking in the glow of higher crude prices, recent strong economic data, a neutral central bank and improving US economic prospects. This morning’s weaker-than-expected US housing data barely registered with traders who are content to sell US dollars.
USDCAD dropped with the rise in oil prices. WTI was on the defensive in early Asia trading but found support at $39.56 and managed to climb back to $40.50/b in Europe. Oil has since slipped off that level although the drop hasn’t had any negative impact on the Loonie. Kuwait oil workers are on the third day of their strike which has cut Kuwait output by 1.3 million barrels/day.
Overnight, it was good to be bearish dollars. The US dollar slumped across the G10 spectrum thanks to a rebound in oil prices and improved risk sentiment, which helped to boost equity markets.
USDJPY was the only exception. It rallied due to veiled but stale threats of intervention, EURJPY, GBPJPY and AUDJPY demand and a rising Nikkei which closed with a 3.68% gain. AUDUSD made a 10 month high while ignoring the release of the RBA minutes.
GBPUSD was the outperformer in Europe. The ORB survey for the Telegraph reported that 52% of respondents would back staying in the EU while only 42% opted to leave. GBPUSD soared to 1.4370 from the New York close of 1.4260. EURUSD drifted higher but didn’t get any support from a mixed ZEW survey.
BoC governor, Stephen Poloz testifies before the House of Commons Finance committee today and the Senate tomorrow. He is expected to parrot his Monetary Policy Report remarks from last week.
USDCAD technical outlook
The intraday USDCAD technicals are bearish while trading below 1.2780 and leaving the door open to a steeper drop to 1.2550, the 76.4% Fibonacci retracement level of the May 2015-January 2016 range. A move back above 1.2780 would re-target the 1.2880-1.2900 area. The short term down trend is well-intact while prices are below 1.3000.
For today, USDCAD support is at 1.2680 and 1.2640. Resistance is at 1.2780 and 1.2805.Today’s Range 1.2680-1.2760
Chart: USDCAD daily