The US dollar is doing its best impression of a Boeing 777 circling a busy airport.  There’s a lot of noise but nothing is going anywhere.

Canadian Housing starts blew above the 200,000 forecast and posted a 212,000 gain in June. The news was ignored by traders and justifiably so.  That data series wouldn’t do anything to keep the Bank of Canada from pulling the rate hike trigger tomorrow.

USDCAD is hovering around the top of the overnight range due to a combination of profit-taking after Friday’s move and position adjustment ahead of Wednesday’s Bank of Canada interest rate decision, press conference and release of the Monetary Policy Report.

10-Jul 11-Jul
Close Open High Low
USDCAD 1.2888 1.2917 1.2918 1.2887
EURUSD 1.1399 1.1394 1.1399 1.1383
USDJPY 114.06 114.32 114.47 114.04
GBPUSD 1.2879 1.2902 1.2926 1.2871
USDCHF 0.9657 0.9689 0.9687 0.9657
AUDUSD 0.7606 0.7610 0.7625 0.7604
NZDUSD 0.7274 0.7216 0.7277 0.7216
USDMXN 17.9452 18.0505 18.0505 17.9024
WTI   44.44 44.15 44.88 44.05


A dull overnight session had some moments and they were thanks to Australian and New Zealand data releases. NZDUSD dropped from 0.7277 to 0.7214 after weaker than expected Electronic Card Retail Sales.  Meanwhile, better than expected NAB Business Survey Conditions (Actual 15 vs. forecast 12) and Sentiment (Actual 9 vs. 7) lifted AUDUSD from 0.7604 to 0.7625.  those gains were erased in European trading.

A drift higher in US Treasury yields and concerns around Janet Yellen’s testimony on Wednesday gave USDJPY a boost from 114.04 to 114.47. It has pulled back a tad in New York trading.

Sterling’s overnight gains from 1.2871 to 1.2926 disappeared in New York trading after Bank of England Deputy Governor Ben Broadbent avoided talking about interest rates in a speech today. Trader concluded that the omission meant he would not vote for a rate hike this month.  GBPUSD dropped down to 1.2862.

EURUSD bounced within a 1.1383-1.1399 range. And has been a non-event in New York trading as well. Traders are torn between expectations for the start of ECB tapering and higher rates.

Oil prices were flat in Asia but they drifted lower in Europe. WTI is in a minor uptrend while prices are above $43.70, looking for a break of $45.10 to extend gains to $47.00.  A move below $3.70 suggests a drop down to $42.00.

Today, a speech by FOMC member and voter Lael Brainard could cause a stir if she stokes the rate hike fires but even so, her remarks will be overshadowed by Janet Yellen’s Congressional testimony on Wednesday.

USDCAD Technical outlook:

The USDCAD technicals are bearish looking for further losses to 1.2770 and then 1.2500. Only a move above 1.3250 would negate the downside pressure.  For today, USDCAD support is at 1.2880 and 1.2860.  Resistance is at 1.2930, and 1.2960

Today’s Range 1.2870-1.2950

Chart: USDCAD 1 hour