Overnight Range 1.3042-1.3121  

USDCAD started the day at the (so-far) high of the session, opening in New York at 1.3111.  Anticipation of USDCAD selling  from month end rebalacing flows and expectations for a stronger than expected domestic GDP report drove USDCAD down to the 1.3067 area.  Those looking for a strong growth report were rewarded when December GDP came out at 0.4% (vs. forecast for 0.3%). USDCAD probed support in the 1.3050 area which is crumbling as this is being written.

It was a fairly quiet FX session in Asia as US travel policies had traders leery of a full-blown risk aversion crisis. Chinese New Year holiday’s didn’t help matters, either.

AUDUSD got a bit of a bump from better than expected business conditions and confidence data but those gains were erased during the European session. NZDUSD traded in a similar fashion but managed to bounce from the overnight low in early New York markets.

The Bank of Japan policy meeting could not generate any excitement and USDJPY bounced within a 113.25-95 range. For the record, the BoJ left rates unchanged at -0.1%, raised the estimate for quarterly growth to 0.5% from -0.5% and in the quarterly report, noted a moderate recovery with downside risks.

EURUSD see-sawed within a narrow range until better than expected Eurozone GDP and inflation data gave it a modest bid which accelerated after New York walked in.  Eurozone Q4 GDP rose 1.8% vs. forecast of 1.7%, y/y.  January CPI rose 1.8%, y/y vs. forecast of a 1.6% gain.

UK data did not help Sterling. Weak Consumer Credit contributed to a sharp drop in GBPUSD from 1.2515 to 1.2409. It bounced in early New York trading.  The UK parliament begins debating Article 50 today.

Oil prices drifted lower in overnight trading but as long as prices are contained within the $50.00-$55.00/barrel range, price movements are just noise.

Meanwhile US data, although likely to be rate hike supportive, will take a back seat to President Trump’s actions and tweets.

Overnight Ranges

Close 4:00 pm EDT-Open 6:00 am EDT

USDCAD Technical outlook:

The intraday USDCAD technicals are bearish following the break below this week’s uptrend line at 1.3130.  A decisive move below support in the 1.3040- 1.3050 area will open the door for a test of major support at 1.2990-1.3010.  A break below 1.2990 could get ugly, trigger stop losses and lead to a test of 1.2750-75.  For today, USDCAD support is at 1.3070, 1.3050 and 1.3010.  Resistance is at 1.3130 and 1.3160

Today’s Range 1.3010-1.3090.

Chart: USDCAD 1 hour