USDCAD chopped around within a narrow range overnight. It is continuing to probe resistance in the 1.3150-1.3200 area but upside momentum  has stalled in concert with a pause in this week’s US dollar rally and thanks to a blip higher in oil prices. Yesterday’s end of day American Petroleum Institute (API) Crude Stocks Change report showed a smaller build (1.4 million barrels) than what was expected. That gave oil prices a bit of a boost and acted as a drag on USDCAD gains.

 

In Asia, USDJPY garnered a lot of excitement. An article in the Nikkei Asia Review, available late yesterday afternoon, suggested that the Bank of Japan would take a number of steps at next week’s policy meeting including deeper negative rates. USDJPY rallied and touched 103.34 before dropping back to yesterday’s closing level  at 102.64 during the European session.  NZDUSD outperformed AUDUSD but both currency pairs traded higher.

 

In Europe, EURUSD trading was a non-event.  The single currency traded in a 1.1210-40 range. Sterling was also quiet and still hasn’t recovered from Tuesday’s  weak CPI data. The UK employment report was as expected.

 

Once again, today’s US data (Mortgage applications, Export/Import Price index) won’t provide any direction although the EIA Crude stocks Change report will be fodder for USDCAD traders.  The BoJ and FOMC meetings are still a week away and FX traders will stay close to home, making for another dull session.

The  USDCAD technicals  are bullish while trading above 1.3050 and  1.3110. Both uptrends are looking to chop through resistance between 1.3190-50 and the 200 day moving average at 1.3263 to extend gains to 1.3400.  However,, the 1.2650-1.3250 range has contained all price movement since May. For today USDCADS support is at 1.3130, 1.3110 and 1.3050.  Resistance is at 1.3190, 1.3210 and 1.3250