USDCAD Overnight Range 1.3055-1.3137      

A horrific terrorist attack in Brussels blasted FX markets out of the doldrums. GBPUSD dropped from 1.4396 to 1.4206 and EURUSD fell to 1.1187 from 1.1251. EURUSD has recovered back above 1.1200 as of 6:30 am PDT. European equity indices are all down as are New York equity futures. The attacks will ensure a risk averse trading environment for the balance of the week.

Asia markets were fairly dull. Japan returned from a long weekend and bought the Nikkei which gave USDJPY a lift. Australia was interesting.  The RBA governor gave, what was described as a “mildly hawkish” speech but he didn’t “talk-up” the Aussie dollar higher.  That may be due to, as the Australian Financial Review reports, “RBA taken to task by US for currency “jawboning”.

USDCAD soared, in a knee-jerk reaction to the Brussels terrorist attacks but the effect was short lived and the currency pair quickly dropped back to pre-event levels.

Today’s US data releases are second tier. The Housing Price Index came in as forecast (0.5%) and didn’t have any impact.  USDCAD trading may be sidelined ahead of today’s Federal budget, due at 4:00 pm EDT. However, the magnitude of the Federal fiscal stimulus initiatives may lead to Canadian dollar demand following the budget announcement, which is due at 1:00 pm PDT.

USDCAD technical outlook

The intraday USDCAD technicals are bullish while trading above 1.3050.  This mornings test and rejection in the 1.3150-70 area and then the subsequent decline back to the intraday uptrend line takes some of the steam out of the rally. A break below 1.3050 will extend losses to 1.2950. For today, USDCAD support is at 1.3050, 1.3010 and 1.2950.  Resistance is at 1.3130, 1.3170 and 1.3200

Today’s Range 1.3030 1.3120

Chart: USDCAD  4 hour