USDCAD Open (6:00 am) 1.3356-59 Overnight Range 1.3340-62
FX markets were choppy, but range-bound overnight and they opened mostly unchanged from yesterday’s close. Traders are waiting for something (anything) to happen but may have to wait until tomorrow’s US and Canadian employment reports are released.
President Trump could spark fireworks near the end of the day as he is supposed to be meeting China Vice Premier Liu He after the latest round of trade talks conclude. It wouldn’t be a stretch to suggest he tweets about his unhappiness with the results sparking fresh fears of a prolonged trade war.
FX markets won’t get any help from US data today. It is just the run of the mill, Weekly Jobless Claims followed by speeches from Cleveland Fed President Mester and New York Fed President Williams.
GBPUSD bounced between 1.3155-1.3189 overnight. Prices rallied after politicians passed a motion to require the government to negotiate a long extension to the Brexit talks in case of a “no-deal” Brexit. The vote passed by one. More importantly, the decision to extend negotiations rests with the EU, not the UK. GBPUSD opened unchanged from Wednesday’s close.
EURUSD was stagnant inside a 1.1231-46 range. Traders ignored news that leading German economists cut their growth forecast to 0.8% from 1.9%, previously.
The rest of the major G-10 currency pairs opened in New York unchanged or very close to unchanged.
USDCAD tested resistance in the 1.3360 area after WTI oil prices slipped from their $62.46/barrel peak. The rally was mostly noise, and the currency pair just drifted with broad US dollar moves. Oil prices are still firm, and recent Canadian data has been better than expected. Today’s Ivey PMI (forecast 51.1 vs previous 50.6) could add to the list which should weigh USDCAD today.
The SNC-Lavalin scandal isn’t going away any time soon, and CBC news injected another wrinkle to the story yesterday. They said that EDC was investigating its loans to the company in 2011. It isn’t even news except for the President of EDC in 2011 was current Bank of Canada Governor Stephen Poloz. Hmmmm.
USDCAD Technical Outlook
USDCAD is consolidating losses from 1.3450 in a 1.3300-70 zone. Prices are near the top of the range and the downtrend line. A break above 1.3380 targets 1.3440 but only a decisive break above 1.3550 would suggest serious USDCAD upside. On the other hand, prices need to break below 1.3210 to open the door to a test of 1.2900. For today, USDCAD support is at 1.3330 and 1.3300. Resistance is at 1.3470 and 1.3405.
Today’s Range 1.3310-70