USDCAD plunged from 1.3420 to 1.3361 following a better than expected January GDP report.  Statistics Canada reported that Real GDP rose 0.3% in January, fully offsetting declines seen in November and December. USDCAD sellers got an added assist from better than expected Industrial Product Price and Raw Material Price Index data for February; both of which were higher than forecast. The news will put a smile on the face of Bank of Canada Governor Stephen Poloz who thought the earlier weakness was because of transitory issues.

Will the third time be a charm for UK Prime Minister Theresa May?  Ms May believes her Brexit deal is the best and only deal for the country.  British MP’s aren’t so sure.  They don’t like it, but they haven’t come up with an alternative, either.  Vote number 3 is today, and it is a crap-shoot.   There was a slew of UK economic reports which were ignored. The vote is what it’s all about. GBPUSD opened in New York at 1.3026, just above the overnight low of 1.3012 and spiked up to 1.3133 on Brexit headlines.

EURUSD slid, undermined by bearish technicals, dovish talk from ECB officials and splatter from the UK’s Brexit debacle. The EURUSD decline led to AUDUSD and NZDUSD giving back their gains made during the Asia session.

US Treasury Secretary Steven Mnuchin tweeted about “constructive trade talks concluding” which helped lift global equity indices.  However, the positive sentiment did not translate in FX with the so-called risk currencies, flat or slightly lower. 

USDJPY traded in a 110.54-92 range, supported by a rise in US Treasury yields but the upside was limited in case of a risk aversion retreat sparked by UK developments.

US Personal Income rose 0.2%, below the 0.3% forecast but better than January’s -0.1% result.  Personal spending was up 0.1%, but it was also below the estimate.  FX markets ignored the results.

The UK Brexit debate, Wall Street’s reaction to US/China trade developments and month end/quarter end portfolio rebalancing flows will dictate trading direction today..

USDCAD Technical Outlook

The intraday USDCAD technicals are bearsih with this mornings move below uptrend line support at 1.3380 which sets up a probe of 1.3330, which if broken will extend losses to 1.3250.  above 1.3410 which guards the March uptrend line on the daily chart which comes into play at 1.3330.  Only a move above 1.3440 will negate the negative USDCAD bias. For today, USDCAD support is at 1.3330 and 1.3290.  Resistance is at 1.3405 and 1.3440.   Today’s Range 1.3310-1.3390