USDCAD Range 1.3035-1.3082
USDCAD drifted lower in early New York trading but that move reversed after US PPI surprised to the upside (0.2% vs. forecast of 0.1%) and Canada Manufacturing Shipments were weaker than expected.
USDCAD was very resilient overnight despite WTI prices dropping to $41.35/bbl, a price not seen since 2009. WTI has clawed back some losses and now sits at $42.64/bbl which was behind the early New York USDCAD drop. The intraday WTI technicals are bearish as are the short term fundamentals. A move below $39.35/bbl should drive USDCAD back above 1.3200.
FX markets were relatively calm in Asia as a rather stormy week fades to the weekend. NZDUSD dipped on soft Retail Sales data while AUDUSD got a little support from positive comments by the RBA Assistant Governor who hinted of a longer pause in interest rate movements.
EURUSD and GBPUSD traded in very narrow ranges. EURUSD gained modestly) on news that the Greek parliament passed the newest bail-out program. GBPUSD just drifted higher.
The week is ending with traders still a little nervous. Not everyone is convinced that the PBoC rate cut was merely an adjustment and not a measure taken to shore up a weaker than publicized economy. That fear added to the existing oil glut is keeping downward pressure on WTI and USDCAD in demand.
The intraday technicals are bullish while trading above 1.2980 with this morning’s move above 1.3030 suggesting that a short term base is in place in the 1.2940-50 area. A decisive break above 1.3060 will extend gains to 1.3120. Longer term, the failure to break below 1.2940 yesterday suggests further 1.2940-1.3210 trading ahead.
Today’s Range 1.3030-1.3120
Chart: USDCAD daily with WTI overlay