Agility Forex Daily

USDCAD open: 1.3680, overnight range 1.3670-1.3709, close 1.3705

USDCAD is under pressure as traders rediscover the commodity currency trade and the benefit of vast, proven oil reserves in west-friendly countries, located far from the war-torn Middle East. Trump’s claim about a lot of progress in the Middle East and additional Iran/US ceasefire talks this weekend have improved global risk sentiment which weighed on USDCAD.

Prime Minister Mark Carney’s government will table a spring economic update on April 28.  Carney described the update saying, “We’re putting in place a series of measures. Some will have short-term payoffs. Many will have payoffs in a few years. The bigger projects, the bigger initiatives, we have to change fundamentally our economy to be stronger, more independent, more prosperous, but we want to make sure that those benefit all Canadians.”

WTI oil dropped from 94.03 to 89.48 on optimism for successful ceasefire extension talks but until oil starts flowing freely through the Strait of Hormuz, WTI downside may be limited to the 86.00/b level.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish below 1.3730 and looking for a break below 1.3660 to target the 1.3610-1.3630 area. A move above 1.3730 opens the door to 1.3770. The RSI is near 27, suggesting weak momentum which may limit follow-through and trigger a corrective bounce.

The medium-term USDCAD outlook is neutral to bearish following repeated failures ahead of the 1.4000–1.4030 area and the sharp rejection from the upper Bollinger Band. USDCAD is now trading below the 100 and 200-day moving averages at 1.3812–1.3818, which should act as resistance on rallies. The lower Bollinger Band near 1.3605 is the next key support, and a decisive break below that level would expose 1.3520.

For today, USDCAD support is at 1.3660 and 1.3610. Resistance is at 1.3730 and 1.3770.
Todays range 1.3660-1.3720

FX Heat Map (6:00 am) one week

FX  open high low 6:00 am

And on Friday, They Rested.

Another headline-driven week is winding down and there is little to no top-tier actionable economic data from Europe, the UK, US or Canada to influence trading. That leaves the state of Iran and US and Israel, US and Lebanon talks remaining as flash points.

US and Iran negotiators are reportedly making progress. Iran wants the Americans to unfreeze some Iranian assets and in return they will allow more ships through the Strait of Hormuz. A sticking point is Iran’s enriched uranium stockpile; America wants it and Iran says no.

Yesterday, in Las Vegas, Trump said “we’re having some fake inflation because of the fuel, the energy prices.” Meanwhile, Kevin Warsh’s Fed President confirmation hearing is April 21.

Taking Stock

Asian equities closed with losses as disappointing guidance from Netflix drove tech stocks lower. Japan’s Topix fell 1.41%, Hong Kong’s Hang Seng lost 0.89% while Australia’s ASX 200 closed flat.

As of 5:30 am PT, European bourses are mixed. The German DAX is up 0.45%, the French CAC 40 has gained 0.41% and the UK FTSE 100 is down 0.18%. S&P 500 futures are up 0.48%, the 10-year Treasury yield is 4.275%, the DXY is 98.03, and gold (XAUUSD) is 4,820.60.

EURUSD

EURUSD traded narrowly in a 1.1772-1.1814 range following news that a Israel Lebanon truce was in force.  The single currency is consolidating yesterday’s losses but remains up 0.78% since last Friday due to mildly positive risk sentiment. ING analysts have pencilled in a 25 bp rate hike at the ECB’s June meeting.

GBPUSD

GBPUSD is struggling in a 1.3505-1.3554 band as the stench of political scandal weighs on the currency pair. UK Prime Minister Keir Starmer faces renewed calls to resign because he appointed Peter Mandelson as US Ambassador, despite Mandelson failing security checks.

USDJPY

USDJPY dropped from 159.53 in Asia to 158.92 in early NY trading and is little changed since last Friday. Prices are supported by firm US Treasury yields, safe haven trade unwinding and downgraded risks of a BoJ rate hike in April. Gains are capped by FX intervention fears.

AUDUSD

AUDUSD drifted sideways in a 0.7154-0.7189 band, supported by improved risk sentiment and hawkish expectations for monetary policy.

USDMXN

USDMXN continues to trade with a bearish bias in a 17.2015-17.2705 band on improved risk sentiment. US Treasury Trade Rep Jamieson Greer is warning that U.S. companies are still shifting production to Mexico, so Washington plans to tighten USMCA rules of origin to make it harder to qualify for tariff-free trade.

China

USDCNY Fix:  6.8622 vs exp. 6.8206 (Prev. 6.8616)

Shanghai Shenzhen CSI 300 fell 0.17% to 4,728.67

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview

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