USDCAD bottomed out at 1.2708 in early trading overnight and then slowly recouped all of yesterday’s losses in a quiet overnight session, devoid of drama and top-tier economic data releases.
Even the Reserve Bank of Australia policy meeting statement couldn’t create much of a stir. That’s because they delivered what was expected; no change in rates and minor tweaks to growth and inflation forecasts.
NZDUSD rallied yesterday and gave back half of those gains overnight. NZDUSD has been in a downtrend since the middle of September and concerns about the new Labour government coalition continue to weigh on the currency pair. The nearly 6 big-figure drop leaves plenty of room for a corrective bounce if Thursday’s RBNZ policy statement is not as dovish as expected.
USDJPY has spent the past week consolidating gains made in October and managed to recoup most of Monday’s losses overnight. Traders continue to be focused on the US interest rate outlook and potential stimulus from tax cuts.
EURUSD traded sideways in Asia and drifted lower in Europe, bottoming out ahead of support at 1.1530. US Treasury Secretary Mnuchin was on Fox news talking about $3 trillion in repatriations from tax changes. At the moment, it is just hot air. Eurozone Retail Sales rose 0.7% (forecast 0.6%) which supported the single currency, just before the New York open.
Sterling edged higher helped by a bump in October House Prices (Actual 0.3% vs forecast 0.2%).
Oil prices are bid. WTI traded in a $57.16-$57.66 range supported by events in Saudi Arabia. Also, Saudi Arabia n officials are spouting aggressive rhetoric about their neighbours, including Lebanon and Iran.
The JOLTS survey constitutes the US data release for the day. .There is no data from Canada, but a speech by Bank of Canada Governor Stephen Poloz could make things interesting, but only if he deviates from what was in the recent policy statement and Monetary Policy report.
Oil price movements and Trump’s Asia tour will be the focus.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish while prices are below 1.2780 looking for a break of the overnight low (1.2708) to extend losses to 1.2665 and then 1.2610. A break above 1.2780 would negate the intraday downtrend and suggest 1.2700-1.2900 consolidation. Longer term, the uptrend from the September 12 low remains intact while prices are above 1.2630. For today, support is at 1.2730 and 1.2705. Resistance is at 1.2780 and 1.2820
Today’s Range 1.2710-1.2780
Chart: USDCAD 4 hour