Overnight Range 1.3031-1.3184        

“The Donald” spoke, and predicted that he will be the “greatest jobs producer that God ever created.”  The dollar hurled.

That was the story yesterday and nausea spread across markets, overnight.  It wasn’t from anything he said but because of what he didn’t say.  For some reason, traders expected the president-elect to divulge more details about his infrastructure spending plans and they got nothing of the sort.

In Asia, USDJPY came under pressure from the open and broke below the New York low of 114.22 as

Europe walked in. It bottomed out at 113.76 and drifted to 114.25 at this morning’s New York open.

EURUSD traders took the single currency from 1.0576 up to 1.0683 in early New York trading.

That trading pattern repeated itself across the G10 currency spectrum.  The US dollar dropped steadily overnight and drifted off the floor just as New York opened.

Despite the recent volatility, the US dollar is still inside the ranges that have contained price movements since December, although those ranges are being threatened.

Global equity markets are in the red, except for the Nikkei 225 which managed a 1.23% gain on the back of the rising yen.

Oil prices rallied despite yesterday’s EIA report of a 4.1-million-barrel increase in US inventories. WTI climbed from $52.08 to $53.17

USDCAD has dropped through major support in the 1.3070-90 area on improved domestic data, firm oil prices and broad-based US dollar weakness

US releases Jobless Claims, Import/Export Indices, with a side of Fed speak from Chicago Fed President Charles Evans and FOMC member Patrick Harker.  Canada will release New Housing Price data.  Traders will still be wondering how far the dollar can fall. The late 2016 “Trade of the Year  included being long US dollars.  That sentiment is causing some pain today.

Overnight Ranges

Open High Low
USDCAD 1.3050 1.3184 1.3032
EURUSD 1.0637 1.0663 1.0572
USDJPY 114.21 115.50 113.76
GBPUSD 1.2270 1.2314 1.2170
USDCHF 1.0081 1.0148 1.0062
AUDUSD 0.7500 0.7513 0.7431
NZDUSD 0.7115 0.7131 0.7047
WTI 52.7000 52.6700 52.1400
Close 4:00 pm EDT-Open 6:00 am EDT


USDCAD Technical outlook:

The USDCAD technicals are bearish. Yesterday’s break below the 1.3160-80 area, representing the medium-term uptrend line that began in May 2016 combined with the loss of support at 1.3145 (the 38.2% Fibonacci retracement level of the 2016 range) and the move through the 200 days moving average (1.3096) warn of further losses to 1.2883. A move below 1.2720 would target the 2016 low of 1.2455 There is some support at 1.3014 representing the 50% Fibonacci retracement level.  For today, USDCAD support is at 1.3030, 1.3010 and 1.2960.  Resistance is at 1.3080 and 1.3140.

Today’s Range 1.3130-1.3230

Chart: USDCAD daily with moving averages