USDCAD Overnight Range 1.3697-1.3767
USDCAD started the daLoonie rally stalled on deficit newsy in New York with a bid tone, carried over from the Asia and European markets. That move continued into the New York session with WTI dropping to $32.80 from $33.50. The Canadian dollar also lost ground due to headlines pointing to a $30 billion Federal budget deficit in 2016/2017, a tad worse than the previous Conservative government forecast of a $4 billion surplus. In addition, there is a bit of “risk-off’ sentiment creeping into markets as evidenced by weaker equity indices and higher gold prices.
In Asia, USDCAD failed to extend yesterday’s gain and traded within a narrow band. The Japanese yen was the best performing G-10 currency and GBPUSD was the worst. JPY rallied on somewhat contradictory comments by Bank of Japan governor, Kuroda, saying “that expansion of the monetary base alone wouldn’t pull up inflation or inflation expectations promptly”. USDJPY dropped. That wasn’t all. JPY demand for year end hedging purposes was reported.
“Brexit” chatter dominated the European session and will continue to do so until June 23, when the referendum is held. GBPUSD remained offered within a narrow range. EURUSD was under-pressure due to a mixed to poor German IFO survey and concern that Brexit issues will rear their ugly heads in other eurozone countries.
USDCAD technical outlook
The intraday USDCAD technicals are modestly bullish above 1.3720 within the context of the week long downtrend from 1.4010 that comes into play at 1.3790. A break above 1.3790 targets 1.3850 and then 1.3910. A move below 1.3720 suggests a revisit to support in the 1.3640-60 area.
For today, USDCAD support is at 1.3720, 1.3680 and 1.3640. Resistance is at 1.3790, 1.3850 and 1.3910
Forecast Range for the day 1.3730-1.3810
Chart USDCAD 1 hour