USDCAD Overnight Range 1.2629-1.2677
The ECB left interest rates unchanged and for the most part Mr. Draghi’s comments were unchanged as well. At least, that’s the assessment of EURUSD traders. EURUSD had drifted lower in case Mr. Draghi or the statement was more doveish than expected. It wasn’t. FX traders awoke from their overnight slumber and sold US dollars. EURUSD spiked to 1.1390 from 1.1290 which led the US dollar lower against the G10 currencies.
FX markets went into stealth mode overnight. There was activity but it was hard to spot. The European majors were largely “flat” for the day due to uncertainty surrounding today’s ECB meetings, specifically Mario Draghi’s press conference. By most accounts, the March ECB meeting didn’t have the desired effects. Mario’s vaunted “bazooka” was more of a wet noodle and today, many were hoping that he would come out aggressively defending his actions. He didn’t.
Asia FX markets were very quiet. USDJPY traded sideways and ignored a 2.7% rally in the Nikkei. Aussie and Kiwi went nowhere although NZDUSD maintained a modestly negative bias.
In Europe, Sterling traders ignored soft March Retail Sales data. (Actual -1.6%, ex-auto fuel vs. forecast -0.3%, m/m). and kept their eyes trained on Brexit issues. The widening gap between Stay and Exit has given GBPUSD a bit of a bid.
Opec Secretary General, Abdulla El-Badri said that the market will be turning around by Q3 and will turn positive by 2017. That has pushed oil prices higher. WTI traded in a $43.62-$44.24 range and is currently at $44.20/b. Apparently Opec’s strategy is to use verbal intervention to shore up prices since they cannot agree on production caps.
This mornings US data releases were mixed. Philly Fed disappointed which helped to temper the enthusiasm for the surprisingly strong Jobless Claims report (Actual Jobless Claims 247,000 vs. forecast 265,000)
USDCAD trading will be dominated by general US dollar sentiment and oil price movements with the proximity of the CADUSD 0.80 cent level (1.2500) acting as a magnet.
USDCAD technical outlook
The intraday USDCAD technicals are modestly bullish while trading above 1.2630 looking for a break of 1.2680 to extend gains to 1.2750. A failure to break above 1.2750 implies additional 1.2600-1.2750 consolidation, albeit with a downward bias. Longer term, the downtrend from January remains intact while prices are below the 1.2950-1.3000 area. For today, USDCAD support is at 1.2630, 1.2590 and 1.2550. Resistance is at 1.2680, 1.2720 and 1.2750.
Today’s Range 1.2590-1.2680
Chart: USDCAD 4 hour