Overnight Range 1.3181-1.3242                              

FX-At-A-Glance

NOTE:  This chart represents gain (or loss) of G10 currencies vs. the US dollar  from NY close-July 25 (4pm) to NY Open July 26, 6:30 am PDT

USDCAD remains at lofty levels despite a broad-based retreat in the US dollar overnight. It started in Asia.   A modestly better-than-expected New Zealand trade balance gave NZDUSD a boost and the rising Kiwi helped lift AUDUSD. The Japanese yen had another great session. USDJPY declined from 105.70 to 104.00 by mid-morning in Europe. Profit taking took it off the bottom, but as of the time of writing, the bounce has been lack-luster.

GBPUSD whip-sawed.  The currency pair dropped in early Asia, recovered into the European start and then repeated the moves in a wider band, only to open in New York, where it closed yesterday. Part of sterling’s volatility was due to MPC member, Martin Weale, saying that weak UK data means stimulus is more likely.  EURUSD popped above 1.1000 due to the overall bearish US dollar sentiment.

Oil prices drove USDCAD and oil prices headed lower.  WTI touched 42.61 coinciding with USDCAD touching 1.3235. There are a couple of factors impacting USDCAD and the dollar in general and they are: a lack of top tier, US economic data and heightened insecurity surrounding the BOJ policy meeting and tomorrow’s FOMC meeting. It is hard to believe that this week’s price-action is anything more than “noise” in a skittish market looking for direction.

Today’s Case-Shiller Home Price index was as expected but for USDCAD the API Crude stocks report and tomorrow’s EIA Crude Stocks report will determine USDCAD direction into month end. For the moment, USDCAD has declined from the overnight peak as WTI has ticked back above $43.00/b.

USDCAD technical outlook.

The intraday USDCAD technicals are bullish while trading above 1.3135 which is the uptrend line from the June 15 low.  The break above 1.3180 adds to the bullish sentiment with a break above 1.3240 targeting 1.3290 and then 1.3350.  A move below 1.3200 would risk a test of the uptrend line but only a decisive break below 1.3135 negates the short term upward pressure.  For today, USDCAD support is at 1.3200, 1.3160 and 1.313o.  Resistance is 1.3240, 1.3290 and 1.3320

Today’s Range: 1.3170-1.3240

Chart: USDCAD 1 hour