USDCAD Overnight Range 1.3018-1.3080                       

The Canadian dollar started the day close to where it left off yesterday with traders patiently awaiting the US and Canadian data releases. Canada GDP disappointed; posting a 2.4% Q1 gain vs. forecasts for a 2.9% rise, q/q.  The month over month decline of 0.2% was worse than the 0.1% predicted. The US PCE data headline number was better than expected while the core data came in as expected, both being US dollar supportive.  USDCAD rallied on the data, jumping to 1.3082 from 1.3015.

Additional gains, at least until 8:00 AM PDT, may be hard to come by if the reports of USDCAD selling for portfolio rebalancing reasons prove correct. However, any USDCAD losses may be both shallow and brief.

The US dollar started the last trading day of the month with a mixed performance overnight.  Asia markets contended with month end flows as well as domestic data.  AUDUSD rallied from 0.7184 to 0.7250 following better than expected Current Account data. The news lifted some analysts Aussie Q1 GDP forecasts  which is due tomorrow and pushed back some rate cut forecasts.  NZDUSD followed the Aussie dollar higher. USDJPY chopped around in a 0.50-point range, torn between better-than expected data, month-end flows and US rate hike expectations.

GBPUSD had a topsy-turvy day, rallying in Asia and then declining steeply in Europe.  The Asia rally was reportedly due, mostly, to month end flows while the European session decline can be attributed to another “Brexit” poll.  The “Leave” side recouped some earlier losses according to a poll by ORB.  “Leave” has 46% of the vote while “Stay” has 51%. Eurozone data did not offer an surprises and FX traders appear unconcerned about risks stemming from Thursday’s ECB meeting.

USDCAD technical outlook

USDCAD is sitting in the middle of its two-day, 1.3000-1.3100 range while mired in a month-long USDCAD uptrend that comes into play at 1.2950. Tthere is a minor intraday downtrend intact while trading below the 1.3070-80 area that is looking for support at 1.3020 to break to lead to a test of the uptrend. A break of 1.2950 would put 1.2820 in play.  A break above 1.3120 will  set up a probe of 1.3200-1.3220

Today’s Range 1.3010-1.3110

Chart: USDCAD daily