The US dollar is steady but firm. Traders ignored this morning’s US Advance Goods Trade Balance data allowing the US dollar hang on to its overnight gains. The greenback rose against the majors except for the New Zealand dollar in a rather dull session.
In Europe, GBPUSD dropped below support at 1.3305 and hit 1.3273. Brexit issues, sparked by the unresolved Irish border negotiations weighed on the Sterling.
EURUSD drifted lower in light trading undermined by mild profit taking, after failing to break resistance at 1.1965 yesterday. ECB Board member Arlo Hansson told MNI that the ECB could end asset purchases by September 2018.
The Asia session was quiet. USDJPY inched higher, helped by comments from New York Fed President William Dudley arguing that he wasn’t too concerned about low inflation.
NZDUSD rose in a bit of a short squeeze ahead of the RBNZ Financial Stability Report due near the end of business today. AUDUSD fell in early European trading but recouped most of those losses by the New York open.
Oil traders are anxiously awaiting news from Opec., due Thursday. There are rumours that Opec will opt for a nine-month extension to production cuts. The uncertainty stems from concern that Russia isn’t on board, yet.
USDCAD traded higher overnight supported by broad US dollar strength, bullish technicals and the risk of soft data releases in the coming days. Today’s Canada Raw Materials Index (Actual 3.8% vs forecast 2.0%) and Industrial Product Price (Actual 1.0% vs forecast 0.5%) didn’t have any bearing on USDCAD trading.
FX markets could be busy today. There are three Fed speakers (Dudley, Powell, and Harker). Jerome Powell’s words will carry the most weight as he is the Fed Chair, in waiting. US Housing data will also get attention led by Case-Shiller Home Price Index (Forecast 6.1 vs previous 5.9%)
The Bank of Canada Financial System Review is on tap. Bank of Canada Governor Poloz follows with a speech and press conference.
USDCAD Technical outlook:
The intraday USDCAD technical are bullish while prices are above 1.2770 looking for a break of 1.2815 to extend gains to 1.2915. A break below 1.2770 suggests another test of 1.2660. For today, USDCAD support is 1.2770, and 1.2710. Resistance is at 1.2815 and 1.2840.
Today’s Range 1.2660-1.2750
