USDCAD Overnight Range 1.3942-1.4077            

USDCAD drifted higher overnight, undermined by retreating oil prices, sliding equity indices and lukewarm risk aversion sentiment.

In Asia, the Reserve Bank of Australia (RBA) left rates unchanged and issued a somewhat optimistic statement adopting a wait and see attitude around the recent financial turbulence. AUDUSD rose and then declined, caught up by general risk aversion sentiment as the commodity bloc currencies declined.

Tepid risk aversion sentiment was the story in Europe, supporting EURUSD, which also got an added lift from Fed Vice Chair Stanley Fischer’s doveish comments, yesterday afternoon. European equity indices followed Asian indices into the red.

WTI oil has declined to $30.09 from $31.53/barrel overnight on fading hopes for production cuts by Opec and Russia. The fact that WTI remains above $30.00/b suggests that traders may still believe that “where there’s smoke there’s fire”

The risk aversion theme has continued in New York. US equity markets are all in the red. News that BP posted a $5.2 billion dollar loss in 2015 put a damper on hopes for a global growth rebound.  However, the USDCAD rally stalled at 1.4077 leaving the intraday downtrend intact.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.4080 and until this area breaks, the bounce from yesterday’s 1.3905 low will be viewed as a correction. A break above 1.4090 will extend gains to 1.4140. For today, USDCAD support is at 1.4020, 1.3980 and 1.3950.  Resistance is at 1.4080, 1.4120 and 1.4160.

Forecast Range for the day 1.4010-1.4080

Chart USDCAD 30 minute

cad feb 2nd