USDCAD Overnight Range 1.2775-1.2889
Canadian Retail Sales tanked and the Loonie sank. USDCAD soared to 1.2889 from 1.2835 when Stats Canada announced that Retail Sales declined 0.1% in June. The forecast was for a gain of 0.5%. Retail Sales, ex-autos declined 0.8% well below the 0.3% that was expected.
The key takeaway from the data is that due to the debate about the direction of US interest rates, in the words of Shania Twain “it don’t mean a thing”. Despite the intraday spike in USDCAD, the Canadian dollar is still stronger than it was at the start of the week and the ill effects of this mornings data are already wearing off.
The US dollar started the New York session up on the day but down on the week against the G10 currencies with the exception being the Australian dollar. AUDUSD came under added pressure overnight with the report that Moody’s had downgraded their outlook on 4 major Australian Banks, in part due to price rigging investigations. USDJPY rallied throughout the Asia session on and then started to drop in early European trading.
EURUSD dipsy-doodled in a 1.1300-65 range in thin trading. German PPI data was the only economic news and no one really cared. Sterling traded in a similar fashion. The GBPUSD range was 1.3110-80. Today’s price action was mostly due to profit taking after a week of solid US dollar losses. Traders are fixated on the US rate outlook and thanks to a variety of FX speakers and this week’s FOMC minutes, more confused than ever.
The oil price rally took a bit of a breather overnight with WTI dropping from $48.71 to $47.91. It has since bounced back to $48.17 and is well above Monday’s low of $44.35/b.
USDCAD technical outlook.
The intraday USDCAD technicals flipped to bullish following this morning’s move above 1.2840 and are now targeting a move through resistance at 1.2890 to test 1.2930. A move below 1.2830 re-opens the door to another probe of 1.2750. For today, USDCAD support is at 1.2830 and 1.2790 Resistance is at 1.2890, and 1.2930.
Today’s Range 1.2810-1.2890