The US dollar was under pressure when New York opened and it stayed that way after the release of this morning’s US Housing Starts data. The 5.5% decline in May, was worse than expected and followed a 2.8% decline in April. Still it will have little impact on the next FOMC decision, meaning any reaction to the data is just “noise”.
EURUSD bounced from the overnight low of 1.1140 to 1.1180 on profit taking which is where it is sitting as of 6:00 am PDT. Eurozone May inflation was “as expected” (Actual 1.4% vs. forecast 1.4% y/y) which supports Mario Draghi’s doveish view. EU officials solved the Greece debt relief problem, for the time being. They gave Greece another EUR8.5 billion and then said “talk to you later”.
GBPUSD traded sideways inside a 1.2752-1.2784 range and is now at the top of the band, supported by the prospect that the Bank of England could raise interest rates as early as August. Of course, that is if the Brexit negotiations, which start next week, go smoothly.
In Asia, the Bank of Japan policy meeting was the major focus. The BoJ left interest rates unchanged, as expected and left the JGB target at 0%. USDJPY rallied on the news rising from 110.85 to 111.37 where it sat at the New York open.
AUDUSD clawed back some of Thursday’s losses, rising from 0.7575 to 0.7607 at this morning’s open. NZDUSD tracked AUDUSD higher. Both currency pairs are trading higher in New York
USDCAD continued to consolidate this week’s losses inside a 1.3420-1.3470 range. The break of major support at 1.3380 and the downtrend line from the May peak keep the focus on the downside.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish while prices are below 1.3290 looking for a break of support at 1.3165 to extend losses to 1.2965. The short term technical outlook is bearish while prices are below 1.3400 the downtrend line being guarded by resistance from the 100 and 200 day moving averages which are 1.3382 and 1.3336., respectively. For today, USDCAD support is at 1.3180 and 1.3160. Resistance is at 1.3280 and 1.3340.
Today’s Range 1.3220-1.3280
Chart: USDCAD daily