Overnight Range 1.3462-1.3505                   

Holiday thinned markets, month end portfolio rebalancing and some chunky US dollar sell orders cooked up a batch of volatility overnight.

USDJPY was particularly whippy. It dropped from 116.70 (NY close) at 116.03 in early Asia trading and then rebounded back to 117.18 by mid-morning in Europe.

EURUSD had a similar fate. It closed in New York at 1.0480 and spiked to 1.0652. It drifted down to 1.0504 in Europe and then bounced back to 1.0590. There wasn’t any specific catalyst for the moves other than the rumours of month end rebalancing flows.

Oil prices have been choppy within recent ranges. WTI bounced between $53.40 and $54.40 torn between expectations for higher prices in 2017 and stubbornly high US crude inventories.

Today will be dominated by month end, quarter-end and year-end portfolio rebalancing flows. USDCAD could head lower with the poor year end liquidity exaggerating the impact.

Happy New Year from all the folks at AgilityForex

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.3520. The overnight move below 1.3480 snapped the uptrend line from December 14 and could lead to a test of support at 1.3360.  A move above 1.3540 will extend gains back to 1.3590.

Today’s Range 1.3380-1.3480

Chart:  1 hour