USDCAD Overnight Range 1.2791-1.2876  

USDCAD sank on a minor data divergence and rising oil prices. This mornings US jobless claims were a tad higher than forecasted while the Canadian New Housing Price Index beat the consensus. Jobless claims rose to 294,000 vs. consensus 270,000 and the New Housing Price Index rose 0.2% vs. forecast 0.1%.m/m. That divergence led to USDCAD dropping from 1.2840 to 1.2791.  A firm WTI price ($46.53/b) and bearish technicals helped to support the move.

The lack of top tier US economic data this week has taken a toll on FX volatility. EURUSD continues to shuffle between the top and bottom of a well defined range (1.1350-1.1450). The same holds true for Sterling and Yen and none of the above is committed to any direction.  It is hard to believe that tomorrow’s US Retail Sales report will change the prevailing sentiment in any meaningful way.

Asia markets were quiet. AUDUSD was on the defensive due to weaker equities while USDJPY stayed bid because of comments from BoJ governor Kuroda.  He didn’t say anything new but a veiled threat of intervention lingers in the air.

In Europe, central bank meetings were the focus with the Norges Bank and the Bank of England on tap. GBPUSD spiked following the release of the interest rate decision because it was unanimous. That is a rather dubious excuse suggesting that the rally won’t be sustained.  The BoE downgraded its outlook and warned of Brexit risks.

As long as WTI continues to drift toward $50.00/b, USDCAD will remain on the defensive.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.2890 supported by the move below 1.2860 which points to a test of support at 1.2800 and then 1.2750. A break above 1.2900 would shift the focus to 1.3000 while below 1.2740 targets 1.2500.  For today, USDCAD support is at 1.2790 and 1.2750.  Resistance is at 1.2860 and 1.2890

Today’s Range 1.2770-1.2860

Chart: USDCAD 4 hour