USDCAD Range 1.3063-1.3109
USDCAD soared and swooned (relatively speaking) on this morning’s release of Canadian CPI and Retail Sales reports. CPI was as expected and Retail Sales had a modest beat. The data, combined with general US dollar weakness vs. G-7 currencies, excluding AUD, has allowed USDCAD managed to scratch out a small gain despite a soft WTI price.
The China August Caixin Manufacturing PMI came in at 47.1 providing further evidence that the Chinese economy was contracting which set the tone for a nervous overnight trading session.
The outlook for WTI prices is negative. Yesterday, the American Petroleum Institute reported that the U.S pumped crude at the fastest pace for a month in July, with American stockpiles about 100 million barrels above the five year seasonal average. That is not good news for the Loonie.
However, if WTI prices remain above $40.00b., USDCAD’s continued failure to break resistance in the 1.3160-80 area may lead to short term traders tossing in the towel on bullish strategies. Do not be surprised to see a Friday profit taking sell-off which may lead to another probe of support at1.3000 by the end of the day.
The intraday technicals are modestly bearish within a 1.3000-1.3200 range, looking for a break of 1.3050 to extend losses to 1.2990-1.30000. A break of this level projects a further dip to the 1.2940-60 area. A decisive break of 1.3200 is needed to put the focus on 1.3450
Today’s Range 1.3010-1.3110
Chart: USDCAD 1 hour