USDCAD Overnight Range 1.3780-1.3843        

The first batch of US economic data following yesterday’s FOMC announcement of a ¼ point rate hike did not provide any indication that another rate increase will occur anytime soon. The Philly Fed index posted a decline of 5.9 when a gain of 1.5 was expected and the details were soft as well. The current Account data was weaker than forecast while Jobless claims were inline with expectations.

USDCAD meandered higher in a calm and orderly fashion in a relatively subdued overnight session. That was all to do with oil.  WTI oil prices remain soft but are above the overnight low of $34.98, currently sitting at $35.40/barrel. However, the rally appears to have stalled in the 1.3850 area in line with the pause in the oil price decline.

Overnight, global financial markets appeared rather satisfied with the way the reaction to the ¼ point rate hike from the FOMC.  They weren’t surprised at the move but because the tone of the statement and press conference was well-balanced and upbeat. Global equity traders were pleased as the major world indices are all higher.

EURUSD drifted lower in Asia and then consolidated in Europe, ignoring the German IFO data. Today’s US data will have little to no impact.  Now that the FOMC meeting is out of the way, traders are free to concentrate on Christmas and year end holiday’s.

The expectation of rising US rates while Canadian rates remain stagnant combined with low and falling oil prices and the current USDCAD price has hung a target on 1.4000.

USDCAD technical outlook

The intraday USDCAD technicals are bullish while trading above 1.3790 looking for a break above the recent 1.3845 high to extend gains to 1.3910 and then 1.4050. The proximity of the 1.4050 will act as a magnet. A move below 1.3790 would lead back to 1.3690.  For today, USDCAD support is at 1.3810, 1.3780 and 1.3730.  Resistance is at 1.3850, 1.3905 and 1.4000.

Forecasted Range for the day 1.3790-1.3850

Chart USDCAD 4 hour