Overnight Range 1.3056-1.3129
The US dollar sank in Asia then rallied in Europe, providing further evidence that the Trump presidency has FX traders perplexed over the greenback’s direction.
Kiwi got the ball rolling in early Asia trading. New Zealand Q4 inflation rose higher than expected (Actual 0.4% vs. forecast 0.3%, q/q) and NZDUSD rose to an eleven month high of 0.7312
AUDUSD tried to follow Kiwi higher but was trapped within a narrow range in part because Australia was closed for Australia Day.
USDJPY bounced within a 113.05-113.50 range in a directionless Tokyo market with dollar gains slowed by Trump protectionist fears.
The bearish dollar sentiment turned to bullish when the European day started. Rising long term bond yields and equity prices led to renewed US dollar demand.
USDJPY punched above minor resistance at 113.950 and extended gains above 114.00. A break of 114.50 would negate the downtrend from the beginning of January and target 115.70.
EURUSD traders saw USDJPY moving higher and hit some bids, driving the single currency from 1.0755 to 1.0710. It popped back to 1.0725 when New York trading began.
The GBPUSD rally that was renewed on Tuesday, was interrupted in Europe. The European Economics Commissioner warned that the Brexit would have a more pronounced effect on the UK economy in 2017/2018. GBPUSD dropped from an overnight peak of 1.2672 to 1.2592.
Another day has arrived and it is another day that US economic data will be ignored. FX traders will keep watch for new Trump proclamation’s threats and executive orders while watching equity and bond markets.
USDCAD held support in the 1.3000-50 zone, an area that has contained all downside moves since September. USDCAD sellers on news that the Keystone Pipeline has been revived may have been premature and that move risks being fully unwound.
Overnight Ranges
| Open | |||
| 26-Jan-17 | High | Low | |
|
USDCAD |
1.3110 | 1.3114 | 1.3056 |
|
EURUSD |
1.0720 |
1.0764 |
1.0713 |
|
USDJPY |
114.29 |
114.37 |
113.06 |
|
GBPUSD |
1.2615 |
1.2672 |
1.2592 |
|
USDCHF |
0.9993 |
1.0002 |
0.9971 |
|
AUDUSD |
0.7550 |
0.7583 |
0.7538 |
|
NZDUSD |
0.7258 |
0.7312 |
.7253 |
| WTI | 52.91 | 53.24 |
52.81 |
Close 4:00 pm EDT-Open 6:00 am EDT
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish while trading below 1.3120 looking for another test of support in the 1.3050 area to extend losses to major support in the 1.2990-1.3000 area. USDCAD is currently breaking above 1.3120 resistance which suggests further gains to 1.3210 which is the downtrend line from the January 20 peak of 1.3385. Longer term, USDCAD remains directionless inside a 1.3000-1.3600 trading band. For today, USDCAD support is at 1.3090 and 1.3050. Resistance is at 1.3120 and 1.3180.
Today’s Range 1.3080-1.3180
Chart: USDCAD 30 minute
