USDCAD Overnight Range 1.2505-1.2680  

Ms. Yellen’s Wild Ride made Mr. Toad’s coaster look like a kiddie-land cradle.The fall-out from the FOMC statement and press conference continued with a vengeance in Asia, albeit with poor liquidity.EURUSD soared to 1.1035 near the end of the NY session and then plunged to 1.0630. There were similar moves for the rest of the majors, as well. The European session wasn’t much different and Greece issues helped remind traders that the EUR still has major issues.

The massive US dollar sell-off, post FOMC, is more a factor of extreme positioning than it is a belief that the Fed radically shifted sentiment. Ms. Yellen specifically said that a June hike could not be ruled out, although very few analysts are buying into that line.  The doveishness stems from a downgrading of forecasts for GDP and inflation in 2015 and a lowering of dot-plot estimates. FX trading is expected to remain choppy, within wide ranges due to on-going position adjustment.

The two key drivers of USDCAD trading for today are US dollar positioning and oil prices. On Monday, the latest IMM spec positioning report showed long Canadian dollar positioning at around $4.0 billion. Obviously that position size has been chopped. Yesterday’s WTI rally halted at resistance at $46.90/bbl and prices turned lower. The Kuwait oil minister’s comments that production will remain steady implies no cuts at the June Opec meeting another negative development for WTI.

.USDCAD technical Outlook

The intraday USDCAD technicals are bullish while trading above 1.2630, looking for a break of 1.2680 to extend gains to 1.2750. A move below 1.2620 suggests further losses to 1.2510.  For today, USD Support is at 1.2630, 1.2570 and 1.2510.  Resistance is at 1.2680, 1.2710 and 1.2750

Today’s Range 1.2610-1.2710