USD TO CAD Overnight Range 1.2442-1.2530  

New York traders wanted dollars and for some reason, they wanted them as soon as they sat down.  The USD has gained across the board despite a modest miss in Jobless Claims. Perhaps, traders are following the lead of USDJPY moves which continues to defy gravity despite some claims that it is overvalued.

USDCAD had stalled just below 1.2500 in overnight action until a renewed plunge in Kiwi and Aussie contributed to the spike to 1.2530, currently.

Part of today’s USDCAD strength may be a result of yesterday’s BoC statement. Some analysts believe that the statement was doveish due to a reference to the currency (The Canadian dollar has strengthened in recent weeks in the context of higher oil prices and a softer U.S. dollar. If these developments are sustained, their net effect will need to be assessed as more data become available in the months ahead.) Extrapolating these words to mean “currency intervention” is a risk is a tad delusional as the BOC has not intervened in FX for over 15 years and has probably forgotten how.

Kiwi and Aussie were also active overnight. NZDUSD got hammered on lower prices for milk solids. AUDUSD dropped on a weak Capex number and USDJPY rallied when BoJ Kuroda failed to mention the currency in a speech. In Europe, Sterling dropped after a miss on Q1 data while EURUSD consolidated within yesterday’s range.

EURUSD appeared to consolidate yesterday’s losses in the European session but bounced higher in New York on the back of a news report suggesting that Greece and its creditors were making progress on an accord. EURUSD jumped to 1.0915 from 1.0830 on the news.

Looking ahead, tomorrow’s Canadian GDP data and month end portfolio rebalancing flows will ensure a volatile session. There are rumours that the 11:00 am fixing will result in USDCAD selling. WTI oil is softer, in part due to a report that OPEC won’t cut output. Oil is trading below support at $57.50/bbl which may be a direct result of the intraday US dollar strength.

USDCAD technical outlook

The intraday USDCAD technicals are bullish and looking for a move to the 1.2570-90 area which if broken should lead to 1.2820, the 2015 high. A move below 1.2480 would see losses extended to 1.2380 and still leave the uptrend intact.

For today, USD Support is at 1.2480 and 1.2440.  Resistance is at 1.2530 and 1.2570.

Today’s Range 1.2480-1.2530

Chart: USDCAD 1 hour with uptrends shown