The US dollar is on the defensive as New York returns from an extended Thanksgiving holiday.
FX markets were a tad skittish in Asia. USDJPY traded choppily in a narrow range in Asia and dropped to 111.16 in Europe. Traders are uncommitted ahead of the US tax debate this week
The antipodeans declined in Asia trading but recouped those losses and then some in Europe. Broad US dollar weakness was behind the gains.
EURUSD was confined to a narrow 1.1912-1.1956 range, supported by news that Germany is gravitating toward another “Grand Coalition’, although the deal is a long way from being closed. EURUSD technicals are looking for a decisive break above 1.1965 to target the 1.2100-30.area.
Sterling remained buoyant because of optimism around the Brexit talks. The Irish border issue remains unresolved
Oil traders are waiting for the results of Thursday’s annual Opec meeting. Prices are off their peak because of concern that the higher prices will attract new US shale production
USDCAD is trading with a bearish bias, undermined by the weak US dollar, high oil prices and bearish technicals. FX traders will be cautious ahead of Tuesday’s BoC Financial System Review report and a speech by the governor.
Today’s US data includes New Home Sales and Dallas Fed Manufacturing Business Index which shouldn’t cause a stir. Traders are looking ahead to Wednesday when US Q3 GDP is due.
USDCAD Technical outlook:
The intraday USDCAD technical are bearish while prices are below 1.2720, looking for a break of support at 1.2660 to extend losses to 1.2600 and then 1.2550. A break of 1.2720 argues for additional 1.2660-1.2830 consolidation. For today, USDCAD support is 1.2660 and 1.2610. Resistance is at 1.2720 and 1.2760.
Today’s Range 1.2660-1.2750
Chart: USDCAD hourly