Overnight Range 1.3115-1.3165
FX markets continued to trade randomly inside well-defined ranges in the overnight session.
The New Zealand dollar was center stage at the Asia open after the Reserve Bank of New Zealand left rates unchanged (as expected) but delivered a somewhat doveish statement. NZDUSD dropped from 0.7263 to 0.7192 before drifting back to 0.7229 in Europe.
The Australian dollar was “extra-whippy,” moving down to 0.7609 from 0.7643 in early Asia and then rebounding to 0.7659 in Europe. A drop in Australian government bond yields and a dip in business confidence was behind the move lower while renewed US dollar selling vs. the other majors gave it the lift.
USDJPY started the overnight session at the low of 111.74 and steadily inched higher to peak at 112.43 just ahead of the New York open. The move is due to position jockeying ahead of the Abe/Trump meeting.
EURUSD was very choppy inside a narrow range. Traders are torn between rising Eurozone political issues including more Greece debt issues and US political developments.
A bump in UK Housing Price Balance to 25% from December’s 23% reading gave GBPUSD a boost, taking it from 1.2499 to 1.2580
Oil prices have continued to rise with traders ignoring the jump in US inventories, preferring to focus on the prospect of higher prices from rising global demand and reduced Opec production.
The Canadian dollar is an after-thought in FX markets. USDCAD is tracking US dollar sentiment but appears to be trading with a negative bias.
Canadian economic data releases have not been much of a factor for USDCAD traders and today’s release of the New Housing Price Index shouldn’t change that fact. The US data calendar is also light. St. Louis Fed President James Bullard is slated to speak this morning. His remarks may be dismissed because President Trump has stolen the show from the central bankers.
|Close 4:00 pm EDT-Open 6:00 am EDT
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish. The break below the minor uptrend line at 1.3180 on Wednesday has kept the focus on support in the 1.2970-90 area. A break above 1.3180 could lead back to 1.3220 but only a decisive move above that level, would negate the downward pressure. For today, USDCAD support is at 1.3110 and 1.3070. Resistance is at 1.3140 and 1.3180.
Today’s Range 1.3080-1.3160
Chart: USDCAD 1 hour
There isn’t any change in the USDMXN outlook and it will continue to track US dollar sentiment vs. the majors. It continues to trade with a slightly negative bias inside the well defined 20.2850-20.8365 range. For today, if prices remain above 20.4380 a move above 20.5345 will put the focus on the intraday downtrend line at 20.6720
Chart: USDMXN 1 hour
Source: Saxo Bank