The US dollar was knocked to the canvas overnight and still on the ropes at the start of today’s New York trading session. Then it got a reprieve. US Durable Goods Orders handily beat the forecast for a 3.0 percent gain in June and rose 6.5 percent. The headline gain was due to Boeing orders. Durable Goods Orders, ex-transportation were 0.2 percent and missed the forecast for a gain of 0.4 percent.
Meanwhile the weekly jobless claims report showed an increase of 244,000 an inconsequential miss from the 241,000 expected.
Still, the US dollar rallied and recouped some of its post FOMC statement losses.
Asia sold US dollars and sold enough to drive the antipodean currencies to fifteen month highs.
AUDUSD leapt from a pre-FOMC level of 0.7915 to 0.8064, Better than expected Import/Export data help to fuel the rally. The US data knocked AUDUSD from its perch and it is now at 0.7993. In New Zealand, Fonterra’s statement of an upward revision to dairy prices and the broad US dollar weakness powered NZDUSD to 0.7556 from 0.7425. Kiwi decline in New York trading to 0.7517.
The Japanese yen went for a roller coaster ride. The FOMC statement drove USDJPY from 112.16 to 110.80. Support held and profit taking took it back to 111.47, where it is sitting at the time of writing.
The doveish Fed sent EURUSD from 1.1627 to 1.1770 before it ran out of steam. It drifted lower in Europe and then the US data drove it even lower. It has found a bit of support at 1.1690..
Sterling followed EURUSD higher but not lower. The GBPUSD rally stalled at 1.3157 but it is hovering around 1.3145. Conciliatory language around the Brexit discussions have provided support, with the Chancellor calling for a post-Brexit transition period.
Oil prices receded from their opening peak of $48.89 to $48.25 after the robust Durable Goods data and the broad US dollar rally. They have recovered somewhat and are trading at $48.60, now. Yesterday’s EIA report of a large inventory draw added to the demand.
USDCAD crushed major support in the 1.2450-65 area yesterday after the Fed’s statement and touched 1.2416 before the end of the day. It bounced back to 1.2490 following the US data this morning, where it is now trading.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish. The break of major support in the 1.2450-1.2465 area has opened the door to a medium term drop towards 1.1950. The downtrend channel from mid-June is intact while prices are below 1.2610. However, the intraday technicals flipped to bullish with this morning’s rally above 1.2460 and are looking for a test of resistance at 1.2505, representing the downtrend line from last week. For today, USDCAD support is at 1.2440 and 1.2410. Resistance is at 1.2505 and 1.2550.
Today’s Range 1.2440-1.2420
Chart USDCAD 4 hour