Overnight Range 1.3360-1.3387     

FX markets have shifted into full holiday mode.  The evidence is in the news that Nintendo’s Super Mario Run hit 25 million downloads on smartphones. That trader you see frantically pushing buttons on his phone; he is not booking trades or analyzing charts, but making Mario run.

In Asia, AUDUSD and NZDUSD traded in narrow ranges. The New Zealand Trade deficit widened but didn’t have much impact.

USDJPY retreated from an early visit to the 118.00 level but the drift lower was all about profit taking and nothing else.

In Europe, EURUSD traded above yesterday’s 14 year low and inched back above 1.0400 on profit taking. European stock markets are slightly in the red which is understandable after the gains that have accrued in the past month. The warm fuzzy feeling from the Italian banking bail-out soured on news that Spanish banks took a nasty hit from an EU court ruling over mortgages.

Sterling stayed within a 1.2326-1.2382 range with on-going Brexit issues and headlines weighing on the currency.

Oil prices managed to hang on to gains made yesterday when the American Petroleum Institute Crude Stocks change report data was leaked early. The rumour of a 4.16 million-barrel draw-down was confirmed at the end of day.  WTI peaked at $53.76 in Europe and currently sits at $53.56.

The rally in WTI prices had USDCAD on the defensive but unable to crack below support at 1.3350.  Longer term, the outlook for USDCAD is bullish.

USDCAD traders will be watching for this mornings EIA Crude Stocks change report to confirm the API draw-down. If so, USDCAD should retest support in the 1.3340-50 area. Markets will be also watching to see if the Dow Jones Industrial Average can crack the alluring 20,000 level. The only US data is Existing Home Sales which shouldn’t have any impact on trading.

USDCAD Technical outlook

USDCAD technicals are bullish. while trading above 1.3080 which represents the uptrend line from May.  The December 13 move above 1.3240 snapped a two-week downtrend and shifted the focus back to the November peak of 1.3588. The intraday uptrend remains intact while prices are above 1.3340, looking for a break of 1.3440 to extend gains to 1.3480 and then 1.3540

Today’s Range 1.3320-1.3390

Chart: USDCAD daily