USDCAD Open (6:00 am) 1.3140-44 Overnight Range 1.3104-1.3187
NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close-July 27 (4pm) to July 28 5:45 am PST
The FOMC statement didn’t impress anyone. It was hawkish if you were expecting it to be and if you were a dove, it was doveish. Who said you can’t please all the people, all of the time?
US equity markets responded as if the statement was doveish judging by the fact that the major indices closed pretty close to where they opened. FX markets appeared to buy into the doveish view as well. The commodity bloc currencies have squeaked out gains as has EURUSD. The single currency was bolstered by better than expected data.
USDJPY is in its own world. Traders have been buying yen on concerns that the much talked about stimulus program may not even kick off today or they are questioning its effectiveness. GBPUSD tried to stay above 1.3200 but was unsuccessful.
Oil prices are still plumbing the bottom of the barrel undermined by the on-going supply/demand imbalance. The issue was just as evident in early June when WTI was pushing $50/b so perhaps the current levels are just the result of a position shake-out suggesting that the bottom may be close.
USDCAD traders are nervous. The retreat from 1.3244 was swift but the bounce from the overnight low of 1.3104 was just as quick. The prospect of US dollar selling for month end portfolio rebalancing and the Canadian long weekend could see a retest of 1.3104 and even 1.3060.
USDCAD technical outlook.
The intraday USDCAD technicals have flipped to bearish following the break of 1.3190 representing the July uptrend line. The subsequent fall below 1.3160 may be signaling a short term top is in place at 1.3244. That will be confirmed on a move below 1.3090. A move back above 1.3210 will target another probe of yesterday’s peak while a move below 1.3090 opens up a visit to 1.3010. for today, USDCAD support is at 1.3140, 1.3090 and 1.3060. Resistance at 1.3210 and 1.3250.
Today’s Range: 1.3100-1.3190
Chart: USDCAD 30 minute