USDCAD overnight Range 1.3166-1.3224
USDCAD spiked above resistance in the 1.3210 area in a reaction to this mornings US and Canadian data, neither of which justified the move. US Q4 GDP came in at 1.9% which was not revised and does not give Fed policy makers any additional clarity on the USD economy. The Canadian Industrial Production data and Raw Materials Price index were mostly as expected.
It’s a big day for FX markets and markets in general. The monthly portfolio rebalancing flows at 11:00 am EST will be the highlight of the morning. The substantial outperformance of US equity indices vis a vis the other global indices suggest US dollar selling at the 1600 GMT fix.
Ten hours later, Donald Trump delivers an “Address to the Joints Session of Congress. CNN say’s the speech isn’t a “State of the Union Address” because President Trump has not been in office for a year.
Whatever you want to call President Trump’s speech, his remarks may knock FX markets for a loop. That concern gave traders around the globe reason to stay close to home.
NZDUSD traded quietly within a 0.7178-0.7198 band while ignoring a slightly wider-than-expected trade deficit. AUDUSD was just as quiet and domestic data had little impact.
USDJPY declined throughout the overnight session and in early New York trading, falling from 112.82 to 112.10. January Retail Sales were higher than forecast
EURUSD traders sat on the fence and the single currency drifted aimlessly within a narrow band. Sterling followed suit with the uncertainty surrounding the upcoming Trump speech overshadowing data and news on the continent.
The Swiss Franc was the biggest gainer overnight, on the back of strong Leading Indicator data.
Oil prices traded sideways. WTI continues to trade within a $53.00-$55.00 range and with an upward bias, although a decisive move above $55.30 is required to extend gains.
USDCAD extended yesterday’s gains supported by general US dollar strength although firm oil prices may limit additional gains.
USDCAD Technical outlook:
The USDCAD downtrend from January remains intact while prices are below 1.3230. A break above 1.3230 opens the door to 1.3290 and then 1.3380. A move below 1.3140 would shift the focus back to 1.3040
Today’s Range 1.3150-1.3230
Chart: USDCAD daily
The USDMXN uptrend from May 2016 remains intact while prices are above 19.4000. The downtrend from the middle of January is still going strong and suggests that a test of the uptrend may be forthcoming. For today, support is at 19.5500 and resistance is at 20.5500
Chart: USDMXN daily
Source: Saxo Bank