USDCAD Open (6:00 am EDT) 1.3329-32 Overnight Range 1.3326-1.3383
The US dollar reversed most of yesterday’s losses in an active overnight session, kicked off by better-than-expected China trade data.
USDCAD opened in New York at overnight session lows undermined by a rebound in oil prices and broad US dollar weakness. The well established 1.3260-1.3460 trading band is not in any danger of breaking today. USDCAD direction will track WTI movements and the greenback. Bank of Canada Deputy Governor is on a panel at the IMF meeting in Washington, but he isn’t speaking about policy.
EURUSD has been in demand, in part because of an M&A order. There are reports of EURJPY buying stemming from the previously announced purchase of Germany’s DZ Bank’s aviation Finance business by Mitsubishi UFJ for €5.7 billion. Also, Eurozone Industrial Production data was a tad better than expected. EURUSD is in a downtrend below 1.1390 which is guarded by resistance at 1.1340.
GBPUSD has inched higher after touching 1.3053 as traders try to decide if the article 50 extension is good or bad for the currency. Bank of England Governor Mark Carney’s comments late yesterday didn’t help. He said that business investment has stalled since the 2016 referendum, which is not really news. GBPUSD’s gains were mostly a factor of the soft US dollar.
USDJPY surged, thanks to the M&A story and because of the rebound in risk sentiment from the China data, which lifted US Treasury yields. USDJPY extended the rally which began with Wednesday’s low of 110.86, reaching 111.95 in New York trading this morning.
NZDUSD climbed from 0.6716 to 0.6744 after the China data took the sting out of soft Business PMI data. (Actual 51.9 vs forecast 54.4) AUDUSD rose with the improved risk tone.
Today’s US data includes Trade and the Michigan Consumer Sentiment Index. There aren’t any Canadian economic reports on tap.
USDCAD Technical Outlook
USDCAD continues to probe both sides of its two-week 1.3280-1.3400 range, looking for a break of either side. So far, no joy. There is a double top at 1.3400 and at 1.3466 capping topside moves while the long term uptrend line from October, which is at 1.3220, limits downside moves. For today, USDCAD support is at 1.3320 and 1.3280. Resistance is at 1.3360 and 1.3400. Today’s Range 1.3300-1.3380.
Chart: USDCAD daily