USDCAD Overnight Range 1.3900-1.3953
Presto! There is nothing like an injection of CNY 130 billion ((USD $19.948 bn) a lower CNY fix and intervention by state owned funds to stem the tide of panic in China’s equity markets. The moves didn’t erase yesterday’s losses but did stop the bleeding.
The US dollar moved higher against the majors except for JPY and the Canadian dollar. EURUSD did not extend its losses despite a weaker than expected CPI print although it remains heavy and near the overnight low. GBPUSD ignored better than forecast employment data and traded down.
The Canadian dollar continues to bounce between 1.3800-1.4000 ahead of key risks this week which include a Stephen Poloz speech on Thursday and employment data on Friday. Neither event is expected to endorse long Canadian dollar positions.
FX markets are keeping one eye on oil price movements and the other on equities ahead of tomorrow’s release of the FOMC minutes and Friday’s US nonfarm payrolls data.
USDCAD technical outlook
The intraday USDCAD technicals are bullish while trading above 1.3910 but need to overcome resistance in the 1.3960-1.4000 zone to extend gains to 1.4055 and then 1.4286 (CAD 0.70 cents). Longer term, the decisive break of 1.3460 (61.8% Fibonacci level) targets the 76.4% level at 1.4500.
For today, USDCAD support is at 1.3910, 1.3860 and 1.3810. Resistance is at 1.3960, 1.3980 and 1.4005
Forecasted Range 1.3840-1.3940
Chart USDCAD weekly