Overnight Range 1.2942-1.3044
NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close-July 18 (4pm) to NY Open July 19, 6:00 am PST
Have you heard about the bird? The bird is the word. And last night the bird(s) in question were the Loonie, Kiwi and the Emu (representing Australia). They all got their feather plucked.
The Reserve Bank of New Zealand got it started when they released a “bulletin” outlining “macroprudential actions aimed at mitigating risks from housing market cycles”. NZDUSD sank as traders increased their bets for a doveish economic outlook update on Thursday and the prospect of an OCR (Overnight Cash Rate) cut in August.
Not to be outdone, AUDUSD dropped following the release of the RBA minutes. There wasn’t anything new but they still supported rate cut expectations in Australia.
The Loonie was collateral damage. USDCAD rallied as the antipodeans sank in part, because of a shift into risk aversion trading. Falling oil prices were cited as another reason for the demand even though WTI prices remained within yesterday’s trading range when USDCAD was .0090 points lower.
EURUSD gave up Asia gains in European trading, undermined by ongoing concerns about Italy and budgetary issues in Spain and Portugal, in addition to very soft German and Eurozone ZEW data. The selling pressure continued in New York trading with EURUSD currently back to the July 11th low. GBPUSD also traded heavy while BoJ stimulus expectations have propelled USDJPY to 106.45.
There isn’t any Canadian data due today and the US data (Housing Starts, Building Permits) came in as expected. That leaves oil price sentiment and technicals to drive USDCAD trading. The Republican National Convention (the Donald Trump Show) is in full swing in Cleveland. This convention is so lacking in “star power” that 1970’s actor, Scott Baio, is described on Bloomberg, as a “luminary”. As light bulbs go, he is pushing out about half of a watt.
USDCAD technical outlook.
The intraday USDCAD technicals are bullish while trading above 1.2950 and looking for a break above 1.3040 to extend gains to 1.3080. If broken, it will lead to a retest of the 1.3150-1.3200 resistance area. A retracement below 1.3000 would extend losses back to 1.2960. Below, 1.2960 will lead down to 1.2910.
For today, USDCAD support is at 1.2990, 1.2960 and 1.2910. Resistance is at 1.3040, 1.3080 and 1.3120
Today’s Range: 1.2970-1.3070
Chart: USDCAD 30 minute