Overnight Range 1.2908-1.2985
NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close-July 13 (4pm) to NY Open July 14 6:30 am EDT
Mark Carney, governor of the Bank of England through a high-speed curve ball, inside and head high at GBPUSD bears this morning. In his post-Brexit comments, Mr. Carney told reporters that in his personal view “some monetary policy easing will likely be required over the summer”. Markets ascribed a 60% chance of a rate cut at today’s Bank of England meeting. They didn’t get it. GBPUSD soared from a pre-announcement low of 1.3208 to 1.3475 before slipping back down to 1.3295 at the time of writing.
Overnight, USDJPY soared following rumours that former Fed chairman, Ben Bernanke, had suggested that the BoJ issue variations of “helicopter money “or “perpetual debt”. USDJPY took flight, rising from 104.325 to 105.94. The Nikkei also rose, gaining 0.98%.
In Australia, a better than expected employment report (full-time jobs 38k vs forecast of 2.5k) lifted AUDUSD to 0.7650 from the close of 0.7605. Kiwi went the other way. NZDUSD dropped a big figure when the RBNZ announced an unscheduled economic assessment on July 21. Can you say rate cut?.
The Canadian dollar continues to bask in the glow of yesterday’s Bank of Canada interest rate statement and Monetary Policy Report. Mr. Poloz and company presented a rather upbeat assessment of the economy. They predicted an eye-popping 3.5% Real GDP growth rate for Q3 and weren’t particularly bothered by Brexit. USDCAD shrugged off soft oil prices and dropped from 1.3080 before the BoC data to 1.2908 in Asia. This morning’s modestly better-than-expected Canadian housing data and an extension of the current bout of risk-seeking trades could see USDCAD losses extend to 1.2835 support.
USDCAD technical outlook.
The intraday USDCAD technicals are bearish while trading below 1.3020 supported by the move below 1.2980 which sets up a test of support in the 1.2880-1.2905 area. A move below 1.2880 targets 1.2835 which represents the uptrend line from the 1.2462 low seen in May. A break above 1.3010 would give a reprieve from the downward pressure and suggest additional 1.2900-1.3100 consolidation. For today, USDCAD support is at 1.2900, 1.2870 and 1.2835. Resistance is 1.2950, 1.2990 and 1.3020
Chart: USDCAD 4 hour