USDCAD Overnight Range 1.2744-1.2816                

Canada Retail Sales data beat expectation’s which helped to extend USDCAD losses from the overnight session. (Retail Sales-April -Actual 0.9% vs. forecast 0.0%, Ex-auto’s 1.3 % vs. forecast 0.6% m/m) The Canadian dollar was not alone in its appreciation vs. the greenback with both AUDUSD and NZDUSD moving higher overnight and in early New York trading. USDJPY was fairly subdued while EURUSD edged higher. Sterling, measured against earlier moves this week, was moribund.

Overnight, traders reviewed Janet Yellen’s testimony to Congress and concluded that she hadn’t changed her cautious tune which led to modest selling of US dollars. Today’s Yellen testimony will be an echo of yesterdays.

Oil prices soared at the end of yesterday on the API Crude stocks report of a large 5.2-million-barrel draw-down.  WTI climbed to $50.50 in Europe but has slipped ever since.  Still the firm oil price is contributing to Canadian dollar support.

The UK referendum on EU membership is the only game in town for the next 2 days. Voting closes at 10 pm on Thursday which is 5 pm EST.  The major UK broadcasters have not commissioned any exit polls due to concerns about accuracy however there are reports that many hedge funds have.  It is expected that the ballot counting will take place between 4: am and 7 am on Friday (11 pm-2 am EDT) with the results know shortly afterward. (All information is from the Telegraph)

That means today and Thursday will be deathly dull while Friday will have fireworks.

USDCAD technical outlook

The intraday technicals are bearish while trading below the 1.2850-70 area supported by the move below 1.2770 which targets 1.2710.  A break of 1.2710 will open the door to a test of 1.2640.  Below 1.2640 is a straight shot to 1.2562.  A move above 1.2790 should lead to another test of the 1.2850-70 zone.

For today, USDCAD support is at 1.2740 and 1.2710.  Resistance is at 1.2790 and 1.2850.Today’s Range 1.2740-1.2820

Chart: USDCAD hourly