USDCAD Overnight Range 1.4045-1.4154
USDCAD is struggling to maintain topside momentum. Yesterday’s USDCAD sell-off on another oil price bounce came to an abrupt end on the hand-off of FX trading to Asia. The late day announcement by the American Petroleum Institute (API) that crude stocks rose 11.4 million barrels’ sucker-punched the Loonie and USDCAD rallied. The damage was limited and WTI stayed above the $30.00/b level overnight.
This morning, concern surrounding the API build has faded. WTI has bounced off the overnight low of $30.14/b and his currently trading at $30.87/b. That move has taken the incentive away from USDCAD bulls and the currency pair is hovering just above the overnight lows.
Elsewhere, AUDUSD rallied on higher than expected CPI data and NZDUSD climbed ahead of today’s RBNZ interest rate decision. Both currency pairs have kept their gains. USDJPY has drifted higher and EURUSD traded lower in New York trading due to FOMC statement concerns
Today’s FOMC decision is just a statement-no press conference. No one expects a rate hike and the prevailing sentiment is that the January turmoil will lead to a doveish statement. If so, the risk is that the statement is deemed to be hawkish, sparking a US dollar rally.
USDCAD may get exciting if the EIA crude stocks report at 7:30 am PST confirms the API report yesterday.
USDCAD technical outlook
The intraday USDCAD technicals are bearish while trading below 1.4230, a downtrend line guarded by resistance at 1.4160. In addition, the morning moves below 1.4110 sets up another test of the 1.4020-40 support area. Longer term, the USDCAD uptrend line since the beginning of January is in the 1.4020-40 area and if it is decisively broken, USDCAD will extend losses down to 1.3800 representing the uptrend line from October 2015.
Today’s Range 1.4020-1.4120
Chart USDCAD hourly