FX markets were choppy, directionless and stuck in cramped ranges. The US dollar closed yesterday with gains against the commodity bloc and losses against the rest. It opened today with minor losses across the board, except against Sterling.
China Trade data was the highlight of the overnight session, and as highlights go, it wasn’t much of one. China’s October Trade surplus shrank to $254 billion as imports and exports were lower than forecast.
AUDUSD and NZDUSD dropped on the news, but the move was quickly reversed. Both currency pairs drifted higher and opened in New York at session peaks.
US presidents used to be satisfied with an armored limo and a six-GMC Suburban convoy when they travel. President Trump upped the ante on his Asia trip He is travelling with all of the above plus three aircraft carrier groups with roughly 22,000 personnel, and about 200 aircraft.
President Trump offered North Korea a carrot and a stick The carrot was a path to a better future. The stick was a threat; “The world cannot tolerate the menace of a rogue regime that threatens it with nuclear devastation.”
USDJPY tried to reclaim ground above 114.00 but was unsuccessful. Broad US dollar strength and US tax plan uncertainties drove USDJPY from 114.00 to 113.59.
EURUSD traders are waiting for a break above 1.1690 or below 1.1490 for direction. The current bias is for a move lower.
Sterling is down on Brexit news. GBPUSD fell from 1.3174 to 1.3115 after reports that talks have stalled. The EU is demanding a bigger divorce settlement.
USDCAD hit 1.2709 on Tuesday and bounced to 1.2818 in what looked like an order-driven, stop loss fueled move in thin markets. Yesterday, BoC Governor repeated that the Bank would take a cautious approach to rate hikes.
Oil prices are flirting with $57.00/b. A smaller than expected draw- down in the weekly API crude Inventory report weighed on prices.
Canada Housing Starts and the weekly EIA Crude Oil Stocks change report are the only data releases today., which suggests today’s FX trading session won’t be much different from yesterdays.
USDCAD Technical outlook:
The intraday UISDCAD technicals are directionless inside a 1.2715-1.2815 range. A topside break lead to 1.2915 while a move below 1.2715 would target 1.2605. USDCAD is currently trading below the mid-point for that range.
Today’s Range 1.2715-1.2815