Overnight Range 1.3214-1.3296

USDCAD started the New York session with a bit of a bid, rising to 1.3296 from the New York open of 1.3270 but those gains have been erased in early trading.

The brakes were applied to the sliding US dollar is a skittish overnight FX market. A Bloomberg headline in late afternoon New York trading that Treasury Secretary nominee Steven Mnuchin warned of an “excessively strong dollar” sent the greenback tumbling in thin markets.  He said “The strength of the dollar has historically been tied to the strength of the U.S. economy and the faith that investors have in doing business in America. From time to time, an excessively strong dollar may have negative short-term implications on the economy.”

In Asia, the combination of Mnuchin’s remarks and news that Donald Trump took the US out of the Trans-Pacific Partnership trade agreement lifted AUDUSD and NZDUSD.

That same news drove USDJPY to the overnight low of 112.53 and EURUSD from 1.0740 to 1.0773.

The dollar’s retreat lost momentum by mid-morning in Asia and it started to rally at the onset of the European session.

EURUSD inched down to 1.0725, USDJPY climbed to 113.48 and the antipodeans gave back the gains made during the Asia session.

Sterling was in the spotlight, again. The UK Supreme court ruled against the government saying that the government needed a parliamentary vote to trigger Brexit. GBPUSD traded erratically in a 1.2435-1.2535 range around the news and finally settled in at 1.2435 when New York started.

WTI oil prices continue to bounce around in a $52.00-$54.00 range supported by indications that Opec members are complying with the agreed upon production cuts

The Canadian dollar has been on a bit of a roller-coaster ride.  USDCAD dropped from 1.3266 to 1.3209 yesterday afternoon. That move was due to news that Trump advisor, Stephen Schwarzman of Blackstone said about NAFTA: “Canada is held in very high regard. We have balanced trade between the U.S. and Canada and that’s not the kind of situation where you should be worrying.” The Mnuchin comments helped to grease the skids.

USDCAD recouped all those losses and then some in European trading.

More than a few FX traders have been blown up by “tape bombs’ in the past few day’s.  US dollar movements are being driven by headlines out of Washington and anything to do with the new administration’s policies.  Technicals and fundamentals serve to entice traders into losing short term trades that are vulnerable to every tweet and headline.

There isn’t any Canadian data and the US data, Existing Home Sales, and Preliminary Markit Manufacturing PMI for January won’t have any impact.

Donald Trump tweeted “Will be meeting at 9:00 with top automobile executives concerning jobs in America. I want new plants to be built here for cars sold here!” Watch for headlines from that chat.

Overnight Ranges

Open High Low
USDCAD 1.3287 1.3291 1.3214
EURUSD 1.0730 1.0771 1.0729
USDJPY 113.43 113.45 112.53
GBPUSD 1.2458 1.2543 1.2438
USDCHF 1.0011 1.0013 0.9962
AUDUSD 0.7556 0.7607 0.7557
NZDUSD 0.7214 0.7262 0.7213
WTI 53.04 53.27 52.87

Close 4:00pm DT-Open 6:00am EDT


USDCAD Technical outlook:

USDCAD has been bouncing between 1.3000 and 1.3450 for the past two weeks and that range is likely to be the norm for the nest few days. The intraday uptrend from last Tuesday’s 1.3015 low remains intact while prices are above 1.3190-1.3210., supported by the overnight rebound back above 1.3250.  A break above 1.3310 will target 1.3390 and then 1.3460.  A move below 1.3240 keeps 1.3000 in play.  For today, USDCAD support is at 1.3250 and 1.3220.  Resistance is at 1.3310 and 1.3340

Today’s Range 1.3220-1.3320

Chart: USDCAD  4 hour