Overnight Range 1.3266-1.3523        

Didn’t see that coming! A guy, the New York Times predicted only had a 16% chance of winning the election, on Monday, is on Wednesday, the 45th President of the United States.

The Republican Party has a firm grip on the US government as they control, the Oval Office, the Senate and the House of Representatives


Source: New York Times

President Donald J. Trump. The pollsters got it so wrong that they owe their clients refunds. And how does Secretary of State Newt Gingrich sound? Yup, he’s baaaack!. Or Attorney General Rudy Giuliani?  Fun times ahead.

FX markets reacted with their usual decorum; there wasn’t any.

EURUSD which floated in a 1.0990-1.1050 band exploded higher, touching 1.1300 as Trump racked up the votes. By the time Trump was delivering his victory speech, EURUSD started retreating and dropped to 1.1030. Early New York traders took the single currency back to 1.1090 at the open. GBPUSD traded in a similar vein.

USDJPY, poised to rally to 1.1000 on a Clinton victory, tanked.  It fell from 105.50 to 101.25 before rebounding to 103.06 in early New York trading.

USDCAD headed lower on anticipation of Hillary winning and was at 1.3260 when the polls pointed to an upset. The rally was sharp and nasty. USDCAD topped out at 1.3524, just below 1.3570 (50% Fibonacci retracement of the 2016 range). The decline was just as steep but found a floor at 1.3350 and early New York trading drove USDCAD to 1.3450.

The Mexican Peso got crushed, losing 14.5% at one point. USDMXN soared from 18.15 to 20.78 before dropping back 19.85.

WTI oil dropped to $43.05 from $45.22 and then recouped all of those losses (and more) before slipping down to $44.85 in New York trading.

Global equity indices sank and New York equity futures are pointing a sharply lower open.

There isn’t any quality US or Canadian data releases today which is probably a good thing as they would be lost in the post-election hyperbole. Canadian’s have a right to be nervous. Mr. Trump called NAFTA, “the worst deal ever” and promised to tear it up.  On the other hand, he promised to approve the Keystone XL pipeline. Today, trading will likely be similar to what occurred following Brexit. All the big noise has happened leaving traders to reassess their global and domestic economic outlooks.

USDCAD technical outlook

The intraday and short term USDCAD technicals are bullish. The overnight break of resistance in the 1.3450 area and the move to 1.3525 argues for a revisit of the level and further gains to 1.3570, the 50% Fibonacci retracement level of the 2016 range. Overnight, support at 1.3250 was tested and it held.  The subsequent move above 1.3380 suggests that 1.3250 is a short-term bottom and the focus clearly on additional gains.  For today, USDCAD support is at 1.3380 and 1.3340.  Resistance is at 1.3480, 1.3530 and 1.3570.

Today’s Range 1.3370-1.3470

Chart: USDCAD 4 hour with Fibonacci