Canadian Manufacturing shipments data rose 1.1 percent in June and that news give the Loonie a lift.  The forecast was for a gain of 0.8% and even though today’s gain matched the May increase, it supports the “improving domestic economy” outlook.

USDCAD had traded quietly within a 1.2618-1.2651 range prior to the news and dropped to 1.2598 immediately afterwards.  Nevertheless, USDCAD is still locked in a 1.2570-1.2700 range, although the bias is negative.

US housing starts beat the forecasts.  The news didn’t have any impact on EURUSD or GBPUSD trading, but USDJPY sank.

EURUSD continued to pare back gains after touching 1.1580 yesterday but the retreat halted at the uptrend line from the July 13 rally. Mario Draghi’s press conference on Thursday will be the catalyst for either gains to 1.1850 or a drop to 1.1100.

USDJPY traded sideways in a 111.89-112.22 range overnight and kept the downtrend intact. The bottom fell out in New York trading and USDJPY touched 111.65. A downgrading of US rate hike expectations is still weighing on the currency.

The antipodean currencies continued to consolidate recent gains. AUDUSD is supported by the release of hawkish Reserve Bank of Australia policy meeting minutes and by recent gains in iron ore prices.

NZDUSD opened in New York in the middle of its 0.7342-0.7386 range, supported by the broad US dollar weakness

WTI oil prices dropped from $46.47 to $47.17 at the end of yesterday when API announced a 1.62 million barrel increase in US crude inventories.  The move didn’t last.  Prices recovered to $46.62 in Europe.  Traders are awaiting the weekly EIA Crude stocks report.

The wait for the ECB and the Bank of Japan policy meetings on Thursday will keep the FX majors inside their recent ranges, making for an uneventful session.

USDCAD Technical outlook:

The USDCAD technicals are unchanged from yesterday.  The trend is down.  Prices are consolidating recent losses inside a 1.2585-1.2700 range.  For today, USDCAD support is at 1.2610 and 1.2580.  Resistance is at 1.2670 AND 1.2700.

Longer term, if USDCAD closes below 1.2635, it projects a deeper drop to 1.2150.

Today’s Range 1.2570-1.2640

Chart: USDCAD 1 hour