Overnight Range 1.3361-1.3403       

The media is trumpeting Trump’s gain in the polls. To FX traders, it’s the sound of “retreat”. The traders are uneasy, sitting on their keyboards and apparently unwilling to drive currencies out of the comfort of their recent trading bands. That made for an uneventful overnight session.

US data is not having much impact on markets.  The ADP employment report missed forecasts and MBA Mortgage Applications were down. No one cared.

The Asia session started off with oil prices in full retreat. At the end of the day, the American Petroleum Institute released the Weekly Crude Stocks change report.  It showed a massive inventory build of 9.3 million barrels of crude. The news comes at a time when oil prices are already under pressure due to near record Opec production and concern that previously announced production cuts, won’t materialize.

Kiwi traders were feeling rather chipper. The surprise jump in the GlobalDairyTrade auction results (reported earlier in New York) combined with a better than expected employment report, made NZDUSD the best performing G10 currency, overnight.

Kiwi’s good fortune didn’t cross the Tasmanian Sea. AUDUSD was the only G10 currency to lose ground overnight, undermined by weak Building Permits data. However, it recouped most of those losses in European trading.

USDJPY slid overnight, undermined by US election polls showing Donald Trump narrowing Hillary’s lead.  EURUSD stayed reasonably bid within a tight 1.1050-1.1100 band and opened in New York in the middle of that range. Eurozone data and German employment data failed to have much impact.

The overnight decline in WTI to $45.70 was enough to limit the Canadian dollar’s participation in the general US dollar weakness.  Traders ignored the Poloz speech and appeared indifferent to the Finance Minister’s “Fall Statement”.  Canadian’s already knew that they were getting “another day older and deeper in debt”.

The FX majors are in for a very quiet day until the Federal Open Market Committee (FOMC) releases their policy statement at 2:00 pm. That may not be the case for the Canadian dollar. The Energy Information Administration (EIA) Crude Stocks Change report, due at 10:00 am could create a kerfuffle, if it confirms the API data. A large increase in crude inventories may drive WTI below the uptrend line from August (currently $45.50/b and extend losses toward $42.20/b.  That would lead to USDCAD probing resistance at 1.3430. Once the FOMC statement is out of the way, traders will be watching US election polls.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while prices are below 1.3415, looking for a break below 1.3360 to extend losses to 1.3275.  A move above 1.3430 shifts the focus to 1.3480.  For today, USDCAD support is at 1.3360 and 1.3320.  Resistance is at 1.3415, 1.3430 and 1.3480.

Today’s Range 1.3360-1.3430

Chart: USDCAD  1 hour