USDCAD Overnight Range 1.2968-1.3083
NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close (4pm) to 6:30 am PDT
Well, you just knew that it would happen. Someone got the idea to take some profits in GBPUSD and that idea spread like wild-fire across currency markets and commodities. GBPUSD ended yesterday at 1.3210 and then popped to 1.3335 in Asia despite domestic political turmoil and fresh downgrades from the rating agencies. GBPUSD extended those gains in New York trading, touching 1.3417 after this morning’s weaker-than expected US data. It has since drifted back lower.
The better tone in markets was helped by a report that Japan was planning a new stimulus budget while the Nikkei managed to squeak into the green by the close. The commodity currency bloc joined in the festivities and CAD, Kiwi and Aussie posted healthy gains.
The modestly better risk tone spread into Europe. GBPUSD managed to add to its overnight gains while EURUSD climbed steadily. Brexit is the story and for all intents and purposes, the only story. For Sterling it can’t be a good one. However, after dropping 0.1900 points since last Friday morning, GBPUSD does have a bit of room to correct, before resuming its downtrend.
FX trading has been choppy since New York started. Today’s PCE data was softer than expected but initial US dollar weakness has faded. WTI rallied from $46.40 at yesterday’s close to $47.75/barrel in New York. The strength in WTI has kept a lid on USDCAD gains. The end of day, American Petroleum Institute’s, (API) Crude Change Report will help determine if the rally has staying power.
USDCAD direction will be continue to be determined by global risk sentiment and oil prices rather than any domestic drivers.
USDCAD technical outlook
There isn’t any change to the USDCAD technicals from yesterday. The 1.2500-1.3200 range remains intact and price action will remain choppy within this band. From an intraday perspective, since breaking above resistance at 1.2670, USDCAD has been in an uptrend which remains intact while trading above the 1.2950-60 area. A break below this level will lead back to 1.2850 and perhaps 1.2790. For today, a move back above 1.385 will extend gains to 1.3150.
Today’s Range 1.2970-1.3070
Chart: USDCAD hourly