USDCAD Overnight Range 1.2389-1.2508    

Yesterday’s USDCAD slide halted in Asia and by the time the smoke cleared, USDCAD was back above 1.2500, albeit only briefly as EURUSD buyers have been relentless.  Overnight, the OECD announced a downgrade to their global growth forecasts. They cut Canada’s growth outlook (the second time this year) to 1.5% (previous 2.2%) while bumping up 2016 growth to 2.3% from 2.1%., citing the damaging effect on the domestic economy from low oil prices. However, the reality is that USDCAD merely followed US dollar moves and ignored the OECD report.

It has been an active start to the New York session. The prospect of a Greece deal continues to lift EURUSD, which is currently at 1.1210, as traders ignore headlines that the German Finance Minister says “optimism on Greek negotiation progress is not justified”.  Traders also ignored better than expected US trade data and an ADP print of 201K (Forecast 200k).  The ECB left rates unchanged and Mr. Draghi’s press conference didn’t deliver any surprises.

In Asia, AUDUSD jumped on a strong GDP print but the gains weren’t sustained. In Europe yesterday’s dollar sellers became dollar buyers allowing the US dollar to rally across the board ahead of the ECB meeting while traders complained of poor liquidity ahead of the ECB meeting.  GBPUSD was hit harder on a poor PMI showing.

USDCAD technical outlook

The intraday USDCAD technicals are bearish following today’s failure to extend gains above 1.2510 and its subsequent retreat below 1.2460 pointing to further losses back to 1.2370.  For the balance of the week, the existing 1.2370-1.2520 range will likely remain intact until Friday’s payrolls reports from the US and Canada.

Today’s Range 1.2380-1.2480

Chart: USDCAD 4 hour Fibonacci target