USDCAD Range 1.3320-1.3375            

USDCAD awoke to demand in early New York trading following a sleepy Asia/Europe session. A small drift lower in oil prices started the move which extended after New York Federal Reserve President William Dudley said that the Fed remains on track for a rate hike. He also said that October was a “live” meeting.  However, it’s not like he hasn’t said the same thing over and over and the rally stalled.

Overnight, USDCAD traded sideways within a fairly narrow band torn between the prospect of another shift to risk aversion on a global slowdown and improving prospects for the US economy with a dash of oil price stability thrown in. Wednesday’s GDP report may provide additional Canadian dollar support if it posts a better than expected 0.2% gain.

FX markets were directionless and unsettled in both Europe and Asia ahead of a heavy data week which has likely set the tone for today’s North American session.  There wasn’t much in the way of data this morning so traders are wondering if there are any implications from the US Speaker of the House,John Boehner’s resignation. Another government shutdown, perhaps?

The IMF President, Lagarde, said that their July objective for 2015 growth is likely unattainable now and may revise the estimate down, in October.

USDCAD technical outlook

USDCAD is in a modest uptrend while trading above 1.3320 with a break above 1.3380 targeting 1.3415 and then 1.3460. On the day, a move below 1.3220 will lead to 1.3170. However, the rally from the May low remains intact and unless 1.2950 breaks decisively, any move lower is merely a correction.

Today’s Range 1.3310-1.3380

Chart: USDCAD 30 minute highlighting trading range