USDCAD Overnight Range 1.4396-1.4538

The ECB left interest rates unchanged at today’s meeting, to no one’s surprise, but a doveish press conference by Mario Draghi caught more than a few people off guard. He opened the door to another round of stimulus at the March meeting which could include rate cuts.  Naturally traders reacted like it was a done deal and slammed EURUSD which dropped from 1.0920 to 1.0780.  The Canadian dollar was a major beneficiary of the EURUSD weakness as it led to EURCAD selling.

The Canadian dollar has embarked on a much need correction following the ECB press conference.  A minor bump in WTI prices from an overnight low of $26.88 to $28.40/b currently and EURCAD selling has USDCAD flirting with support in the 1.4390-1.44 area.

There was little in the way of data during the Asia session leaving traders to spook themselves on reports of possible Bank of Japan easing next week. That helped turn an early session USDJPY retreat into a minor rally and let USDJPY open where it closed in New York, yesterday.  Aussie and Kiwi just bounced around within recent ranges but are off the lows.

The Bank of Canada’s decision to leave rates unchanged while they await the impact of the federal government’s stimulus plans to be announced in the April budget, put the BoC on shelf and leaves USDCAD direction to oil price movements and global risk sentiment.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.4560 and the move has accelerated with the break of support in the 1.4440 area.  A break of 1.4380 would extend losses to 1.4250 which represents the 50% Fibonacci retracement level of this year’s move.  For today, USDCAD support is at 1.4380 and 1.4340.  Resistance is at 1.4440 and 1.4490

Forecasted Range: 1.4380-1.4480

Chart USDCAD 4 hour