Overnight Range 1.3094-1.3139          

The US dollar opened in New York with tiny losses against the G10 currencies, inside of narrow trading bands.

The losses got a tad bigger following the release of a weaker than expected Retail Sales report. For November. (Actual 0.1% vs. forecast 0.3%, ex-autos 0.2% vs. forecast 0.4%, m/m).

The miss in Retail Sales was partially offset by an rise in the November Producer Price Index.  However, FX ranges will remain quite narrow until the FOMC announcement and Janet Yellen’s press conference starting at 11:00 am PST.

Overnight, FX markets were very quiet. China credit data was a tad firmer than expected but it didn’t have any impact.

Australia new motor vehicle sales were soft which undermined AUDUSD in Asia.  The losses were recovered

In Japan, the quarterly Tankan Survey showed an improvement in Manufacturing Sentiment for the first time in six quarters.  Local economists suggest the data points to a gradually improving economy. USDJPY dipped briefly on the news but quickly bounced back.  The recovery was short lived and USDJPY was near the overnight low (114.89) in early New York trading.

EURUSD traded randomly within a .0055-point range (1.0610-65) while ignoring Euro-area data.

Sterling traded sideways in Asia and attempted a rally in the European session following a better than expected UKK employment report. It didn’t last.  GBPUSD declined and opened in New York at the bottom of the narrow overnight range.

Oil prices never really recovered from Tuesday’s end of day API Crude stocks change report.  API reported a 4.7-million-barrel build in US crude inventories.  WTI dropped to $52.36 from $52.86. and then spent the overnight session drifting within a $52.06-$52.50 range.

The Canadian dollar has been resilient. USDCAD traders have ignored the intraday oil price gyrations and appear to be focused on a test of major support in the 1.3070-90 area

USDCAD Technical outlook

The intraday USDCAD technicals are bearish and in a steep downtrend channel that began at the end of November, coinciding with the Opec announcement and the rally in WTI. The top of the channel is in the 1.3150-60 area while the bottom is in the 1.3000-10 zone. However, significant resistance looms in the 1.3070-90 area, stemming from the 200-day moving average and uptrend line support from May.  For today, USDCAD support is at 1.3090 and 1.3060.  Resistance is at 1.3130 and 1.3160

Today’s Range 1.3060-1.3160

Chart: USDCAD 4 hour