December 18, 2019
USDCAD open 1.3147-51 (6:00 am EST) Overnight range 1.3137-1.3174
The forecasters nailed their Canadian inflation predictions. November CPI rose 2.2% y/y and Core CPI rose 1.9%, both as expected. The Canadian dollar barely wobbled on the news.
There wasn’t a whole lot of anything for FX markets to get excited about overnight, so they didn’t. European traders largely ignored UK, German and Eurozone data and the US dollar opened in New York, little changed from yesterday’s close.
FX Market Snapshot
Change in currency value against the US dollar from NY close to NY open
Source: Saxo Bank/IFXA
EURUSD see-sawed in a 1.1127-53 range with most of the action occurring around the release of the German IFO survey. The survey showed higher than expected readings for Business Climate, Current Assessment, and Expectations. The release of Eurozone inflation data tempered any positive sentiment from the survey. Headline CPI was unchanged at 1.0% y/y in November while Core-CPI was unchanged at a low 1.3% y/y. There is reportedly about $2.9 billion notional worth of EURUSD option expiries today, with strikes between 1.1125-1.1150. The single currency dropped below the overnight low, hitting 1.1111 in early New York trading.
GBPUSD bounced around in a 1.3074-1.3133 range as weak UK data, and fresh Brexit fears weighed on the currency. November CPI was unchanged at 1.5% as was Core-CPI at 1.7% y/y. PPI prices were below expectations. Prime Minister Boris Johnson’s plan to outlaw an extension to Brexit transition talks beyond 2020, is also weighing on prices, which led to GBPUSD touching 1.3161 in New York, today.
USDJPY was parked in a 109.41-51 range, with traders awaiting the Bank of Japan Monetary policy decision tomorrow. The BoJ is expected to keep the door wide open to more monetary easing, but to leave policy unchanged at this meeting.
AUDUSD and NZDUSD traded sideways, as both the year and the euphoria from the US/China trade news wind down. Australia employment data is due tomorrow.
USDCAD continues to consolidate recent gains, undermined by steady WTI oil prices above $60.00/barrel. Prices are holding steady in the middle of the 1.3000-1.3300 range which should contain price action well into January 2020.
There are no US economic reports of note today.
USDCAD Technical View
The intraday technicals are bearish while prices are below 1.3180 and are looking for a break of support in the 1.3105-15 area to extend losses to 1.3040 and then 1.3010. A move above 1.3190 suggests renewed 1.3115-1.3340 consolidation. For today, support is at 1.3140 and 1.3105.. Resistance is at 1.3180 and 1.3230. Today’s Range 1.3110-1.3180
Chart: USDCAD 30 minute
Source: Saxo Bank