April 16, 2019

USDCAD Open  (6:00 am EDT) 1.3383-86  Overnight Range 1.3371-1.3400

EURUSD opened at 1.1302 and then drifted lower to 1.1281. Reuters reported that “sources” said a “significant minority” of rate-setters in last week’s policy meeting expressed doubt that a long projected growth recovery is coming in the second half of the year and some even questioned the accuracy of the ECB’s projection models, given their long history of downward revisions.” Prices quickly recouped their losses.

Even if the data is “doubtful”, today’s German and Eurozone ZEW Economic Sentiment surveys were better than expected.

GBPUSD bounced in a narrow 1.3084-1.3099 range overnight and inched lower in early New York trading. The UK employment report was as forecast although some analysts believe Brexit distortions are at play.

USDJPY continues to consolidate last week’s gains, and it traded sideways in a 111.87-112.03 range.  Prices are supported by relatively firm US 10-year yields of 2.562%.

AUDUSD got spanked after the RBA minutes revealed that rate cuts were discussed.  The policymakers didn’t think there was a strong case for an adjustment in the near term. However, economists at Westpac Bank beg to differ.  AUDUSD fell from 0.7174 to 0.7146.

NZDUSD dropped to 0.6744 from 0.6767, in part because RBNZ Governor Adrian Orr said the monetary policy easing bias was still in place.  He cited softer economic conditions abroad and the risk of lower than expected Q1 inflation for the view.

USDCAD rallied to 1.3389 from 1.3298 yesterday following the release of the Bank of Canada quarterly Business Outlook Survey. It was expected to be weak, and it was, but a tad more than expected, justifying the Bank of Canada’s “rates on hold” stance.  USDCAD continues to be underpinned by the drop in WTI oil prices from their $64.64/barrel peak to $63.50/b today and by broad US dollar strength as evidenced by the rally in the US dollar index.

USDCAD Technical Outlook

The intreaday USDCAD technicals bullish inside the well-defined 1.3260-1.3460 range that has contained price action since the beginning of March.  The intraday uptrend is intact while prices are above minor support at 1.3370 but prices need to break above the double top at 1.3400 or else risk a retest of 1.3290. For today, support is at 1.3370 and 1.3340. Resistance is at 1.3400 and 1.3440.

Today’s Range 1.3340-1.3420.