September 26, 2019

USDCAD open 1.3251-55 (6:00 am EDT)    Overnight range 1.3248-1.3266

The commodity currency bloc enjoyed a modest bid in Asia, led by a NZDUSD rally.  FX traders continued to dismiss the clamor around Trump’s political fortunes as “noise,” while focusing on Trump’s comments that a US/China trade deal could happen “sooner than you think.”

The US dollar closed yesterday with gains across the board and opened in New York today on a mixed note.

FX Market Snapshot

Change in currency value against the US dollar from New York close to New York open

The ongoing UK political farce is taking a toll on GBPUSD which continues to give back September’s gains. GBPUSD climbed from 1.1970 on September 3, to 1.2577 last Friday. Prices dropped steadily, touching 1.2304 overnight. Profit-taking took them to 1.2340 in early New York trading. The short term technicals turned bearish following the break below 1.2380, which suggests a retest of 1.2120.

EURUSD continues to be weighed down by broad US dollar strength and weak Eurozone data. The ECB Economic Bulletin echoed Mario Draghi’s earlier comments warning that the risks to the Eurozone economy are to the downside.  The intraday technicals are bearish while trading below 1.0950, targeting 1.0850.

USDJPY traded with a positive bias inside a narrow 107.57-107.76 range, underpinned by a small rise in 10-year US Treasury yields which rose from 1.694% to 1.715% before slipping to 1.707% in early New York trading.

NZDUSD climbed from 0.6273 to 0.6310 on modestly bullish comments from RBNZ Governor Adrian Orr. He said rates would remain low, but we are “unlikely to require nonconventional monetary policy tools,”   AUDUSD  is being weighed down by concerns the RBA may cut interest rates next week.

USDCAD is trapped in a narrow 1.3230-1.33050 range and has been for ten days. Steady to firm oil prices and diminished risks for a Bank of Canada rate cut offset, demand from steady US dollar gains.

Today’s US data includes Q2 GDP, PCE prices, Pending Home Sales and Initial Jobless Claims. There aren’t any Canadian data reports.

USDCAD Technical View

The intraday technicals are mildly bearish looking for a decisive break of 1.3240 to extend losses to 1.3210 and then 1.3180.  A move above above 1.3280 would shift the focus to resistance in the 1.3340 zone.  Longer term, USDCAD is in a triangle formation. A break of either 1.3180 or 1.3340 suggests a 0.0300 point move.  For today, USDCAD support is at 1.3240 and 1.3210.  Resistance is at 1.3280 and 1.3310.  Today’s Range 1.3230-1.3280

Chart: USDCAD daily

Source: Saxo Bank