USDCAD Range (including Monday) 1.3083-1.3175              

Prime Minister Harper’s decision to dissolve parliament and kick off a 77 day election campaign couldn’t have come at a worse time for the Canadian dollar.  Oil prices were under pressure and when early polls showed the NDP leading the popular vote, traders scrambled to buy USDCAD while most Canadian’s enjoyed a holiday.

Yesterday’s US data dump was a tad disappointing for those looking for conclusive evidence of a September rate hike. It was mixed. ISM was lower than expected but new vehicle sales were at 2006 peaks. Inflation and PCE were as expected. There wasn’t any US data of note today.

The RBA stole the spotlight overnight. Leaving rates unchanged was expected but dropping the reference for a need for a weaker currency wasn’t. AUDUSD rallied supported by gains in Chinese equity markets which also helped lift commodity prices.

USDCAD will spend the rest of the day drifting within the overnight range with traders keeping an eye on WTI prices which are off yesterday’s low but well off this morning’s high as well. (currently $45.96/bbl)

Technical Outlook

The intraday technicals are bullish while trading above 1.3110 which represents both the minor uptrend line from last Wednesday and a series of intraday lows since Friday afternoon. The short term technicals are bullish as well following the break of strong resistance in the 1.3035-75 area which sets up further gains to 1.3460. For today, USD support is at 1.3110 and 1.3080.  Resistance is at 1.3150 and 1.3180.

Today’s Range 1.3110-80

Chart: USDCAD 4 hour