Loonie traders were mostly spectators to a busy overnight FX session. USDCAD drifted higher as it consolidated last week’s losses. Firm oil prices ahead of the November 30 Opec meeting are competing with divergent BoC/Fed short-term interest rate policies and NAFTA concerns for directional dominance.
In Asia, AUDUSD rallied after a firm Business Confidence/Conditions report. Those gains ere erased when China posted weaker than expected Industrial Production data (Actual 6.2 vs forecast 6.3) and Retail Sales (Actual 10.0 vs forecast 10.4)
The weak China data and divergent RBNZ/Fed interest rate policies weighed on NZDUSD.Prices have recovered off the lows in early New York trading.
USDJPY started with a bid touched 113.90 before dropping back to 113.60. The currency pair continues to be supported by yesterday’s dovish comments from BoJ Governor Kuroda and firm US Treasury yields.
EURUSD awoke from its slumber and is testing key resistance at 1.1725. A decisive break above this level would suggest further gains to 1.1835. Better than expected German ZEW confidence and Eurozone GDP that was as predicted, led to EURUSD rising from 1.1662 to 1.1725.
Sterling was choppy. Weaker than expected CPI (Actual 3.0% vs forecast 3.1%), October Retail Sales (Actual 0.1% vs forecast 0.2%, m/m) and PPI data undermined the currency pair. GBPUSD dropped to 1.3077 from 1.3127. It climbed back to 1.3110 in New York trading.
The only US data on tap is PPI and it is a third-tier release so should not be a factor. The US dollar is near key resistance in EURUSD (1.1725) and major support in GBPUSD (1.3070-75). Today’s European and UK data left those key levels intact but that could change today.
USDCAD Technical outlook:
The intraday USDCAD technicals are bullish while prices are above 1.2710, looking for a break of resistance at 1.2760-70 to extend gains back to 1.2900. A move below 1.2710 will lead to 1.2690. A decisive break of that level will lead to 1.2610. For today, USDCAD support is at 1.2710, 1.2690 and 1.2650. Resistance is at 1.2740, 1.2760 and 1.2810.
Today’s Range 1.2710-60
Chart: USDCAD 4 hour