USDCAD Overnight Range 1.3500-1.3620        

USDCAD launched into orbit in early New York trading when WTI oil prices broke through the 2015 floor rising to 1.3617 from 1.3540 before breakfast.

USDCAD took out minor resistance at 1.3520 and shot up to 1.3550 in Asia, chopping around that area during the European session. It’s all due to oil prices and the prospect that they have a lot further to fall. Even Santa and everyone of his elves are on the bearish Loonie bandwagon.

WTI oil prices moved off of the 2015 low in the $37.75-80 area, but just barely helped by news the China increased oil imports in November by 7.6%. The bounce was of the “perished feline” variety as New York traders came in and sold oil, posting a new 2015 low of $37.70/barrel.

Low commodity prices were the story in Australia as well.  The benchmark iron ore price hit a 2007 low and AUDUSD retreated.

EURUSD traded in a fairly tight 1.0830-80 range as traders continued to re-evaluate positions following the weaker-than expected ECB stimulus package and ahead of the FOMC interest rate decision next week.

The Canadian dollar is very vulnerable to Bank of Canada governor, Stephen Poloz’s speech today.  Last January, he cut rates in response to oil prices falling 39%. WTI has dropped nearly 25% since October. In addition, the Canadian economy has been underperforming BoC expectations. A doveish speech would lead to renewed USDCAD buying.

.USDCAD technical outlook

The intraday USDCAD technicals bullish. Yesterday’s break of resistance at 1.3460 and today’s break above 1.3520 point to additional gains to 1.3650. Above 1.3650 targets 1.3750 and then 1.4025. A move below 1.3390 would negate the upside pressure and allow for some 1.3340-1.3600 consolidation.

Forecast Range for the day 1.3560-1.3650

Chart hourly USDCAD and Oil