Overnight Range 1.3161-1.3209          




NOTE:  This chart represents gain (or loss) of  G10 currencies vs. the US dollar  from NY close-July 26 (4pm) to NY Open July 27, 5:45 am PST

Japan stimulus speculation roiled USDJPY in Asia and clipped the antipodeans in the process. Last night’s story was that the Japanese fiscal stimulus package would be 27 trillion yen and USDJPY soared.  In was only yesterday that a report debunked last week’s rumour of a 20 trillion yen plan and USDJPY tanked. The only certainty is that on Thursday, the BoJ may announce some sort of stimulus plan.  Meanwhile the USDJPY rally clipped AUDUSD and NZDUSD. The AUDUSD decline was further assisted by soft Q2 CPI data (Actual 1.1% vs. forecast 1.3%, q/q) which keeps the door open for an August rate cut.

In Europe, GBPUSD traded sideways but with a negative bias. UK data has diminished importance as it is pre-Brexit. EURUSD hugged a narrow band with traders waiting this mornings US data and this afternoons FOMC statement.

USDCAD shrugged off a disappointing API Crude stocks change report which showed only a 823K barrel draw-down compared to expectations of 2.3 million barrels and remained well-off of yesterday’s 1.3242 peak. However, the data renewed downward pressure on WTI and halted the halted USDCAD losses at 1.3161. A break below $42.18 (38.3% Fibonacci of Feb-June range) would target $39.32/b and have USDCAD pressing up against 1.3350-1.3400. Having said that, WTI is near support and USDCAD resistance at 1.3240 has held since April.  FX traders are bullish USDCAD and if 1.3160 breaks the retreat will be fast.

This morning’s US Durable Goods report was worse than expected at -4.0% in June.  The forecast was for a decline of 1.1%.  The US dollar retreated ever so modestly on the news because the data is volatile and the FOMC statement is only a few hours away.  While not the favoured scenario, a moderately hawkish statement is a clear risk due to the slew of data improvements since the last meeting.

USDCAD technical outlook.

The intraday USDCAD technicals are consolidating recent gains in the 1.3160-1.3240 area with the uptrend from the July low firmly intact. Resistance at 1.3240 has capped rallies since April and will r.be etested again on a move back above 1.3215. A break below 1.3160 will lead down to 1.3080.  For today, USDCAD support is at 1.3160, 1.3130 and 1.3080.  Resistance is at 1.3220, 1.3240 and 1.3280

Today’s Range: 1.3160-1.3240

Chart: USDCAD 4 hour