April 30, 2019

USDCAD Open (6:00 am EDT) 1.3446-49   Overnight Range 1.3427-1.3478

This morning’s Canada GDP data halted a mild USDCAD retreat. February GDP contracted 0.1% due to declines in both goods producing and services-producing industries, as per Statistics Canada. Prices for Raw Materials rose only 2.8% in March, below the forecasts for a 3.9% gain while February’s result was revised lower. However, the increase in Industrial Product Prices of 1.3% offset the news.  USDCAD spiked to 1.3460 from 1.3428 but quickly retreated to 1.3440.  Possible good sized selling of USDCAD for month end rebalancing purposes is weighing on the currency pair, although losses are likely to be short-lived.

The US dollar was under pressure in Europe.  Some better than expected Eurozone data combined with wide-spread selling by portfolio managers knocked the US dollar lower, particularly against EUR, GBP, CHF, JPY, and CAD. 

Eurozone Q1 GDP rose 0.4%, q/q (forecast 0.3%) while the unemployment rate dipped to 7.7% from 7.8%. Firmer German inflation data also supported prices.  EURUSD touched 1.1177 before climbing steadily to 1.1223 in New York trading this morning.

Sterling mirrored EUR price action in Asia and got lively when Europe opened. GBPUSD rallied to 1.2995 from 1.2929, boosted by month-end demand to sell dollars for portfolio rebalancing purposes.

Japanese markets were closed, but USDJPY still inched lower, falling from 111.67 to 111.29, before creeping higher into the New York open.

AUDUSD soared then sank when China Manufacturing PMI data reports were released. They were weaker than expected  ADUSD dropped from 0.7068 to 0.7035in Asia before recouping almost all those losses in Europe.  Kiwi traded in a similar fashion and both currency pairs opened in New York close to flat compared to Monday’s close.

WTI oil prices are trading back above $64.00/ barrel, and they are currently 6.4% above where they were at the start of the month. Iran and Venezuela sanctions support prices while the prospect of renewed economic growth from a China/US trade deals caps the topside.

Bank of Canada Governor Poloz and Deputy Governor Wilkins are reporting to the House Finance Committee beginning at 11:00 am (EDT)  They are expected to repeat their comments from last week, following the Monetary Policy Report press conference.

USDCAD Technical Outlook

The intraday are bearish while prices are below 1.3480, looking for a break of 1.3430 to test 1.3370.  A break above 1.3480 targets 1.3520. For today, USDCAD support is at 1.3430 and 1.3380.. Resistance is at 1.3480 and 1.3520  Today’s Range 1.3405-1.3470

Chart: USDCAD  30 minute