Overnight Range 1.3113-1.3211  

The US dollar shrugged off this mornings mixed US data (Philidelphia Fed Manufacturing Index and Jobless Claims) keeping the US dollar on a firm footing, particularly against the commodity currency bloc. EURUSD and USDCCHF are the exceptions.

The major Asia equity indices are in the green, European bourses are mixed and US equity futures are pointing to flat open.

In Asia, USDJPY posted gains co-inciding with the US presidential debate and what appeared to be a winning performance from Hillary Clinton.

The Australian dollar drifted aimlessly higher until mid morning when the domestic employment report was released. Then it got crushed. Australia lost 9,800 jobs, of which 53,000 were fulltime. AUDUSD dropped from 0.7730 to 0.7655 on the news. However, the data should be taken with a grain of salt because, like Canada, it is a very volatile report. NZDUSD followed AUDUSD down.

EURUSD traded in a narrow band ahead of today’s European Central Bank meeting and then moved higher after the policy statement. The ECB failed to announce a “tweak in the monthly asset purchases, which had been rumored. That led to a knee-jerk reaction rally in EURUSD to 1.1038 from 1.0970.

GBPUSD was very choppy inside a narrow 1.2250-1.2300 band. Disappointing UK Retail Sales data has kept sterling at the bottom of the range.

Oil prices have given back almost all of yesterday’s gains. Oil rallied yesterday when EIA reported a 5.2 million barrel decline in US crude inventories. WTI touched $51.91. Overnight, the peak was $51.54. Prices slid steadily lower and are currently hovering just above $51.00/b, a move being attributed to profit taking.

USDCAD blasted above the overnight peak in part due to EURCAD demand following the ECB statement. In addition, yesterday’s Bank of Canada’s admission that rate cuts were discussed at the Governing council meeting, delivered all the benefits of a rate cut, without actually doing anything. The mere thought that Canadian rates could go lower will leave the Canadian dollar on the defensive.

Now that the ECB policy announcement is out of the way, there isn’t a whole lot of anything to whet the appetites of traders. That leaves oil price swings and US election chatter to drive direction. The US will release Leading Indicators which is expected to rebound to 0.2% from Augusts decline of 0.2%.

USDCAD technical outlook.

USDCAD remains rangebound and noisy within a 1.3000-1.3315 band and is currently sitting in the middle of that range. The intraday USDCAD technicals are bullish while trading above 1.3130 with today’s break of 1.3190 setting the table for another assault on the 1.3315 double top area. The uptrend line from the August 18 bottom remains intact while prices are above 1.2990. Coincidently, yesterday’s oil fueled USDCAD decline halted just above that level at 1.3008. For today, USDCAD support is at 1.3130 and 1.3090.   Resistance is at 1.3220 and 1.3260

Today’s Range 1.3140-1.3240