Overnight Range 1.3178-1.3208                          \

USDCAD waffled around in a narrow range overnight.  Traders ignored firm oil prices and appeared content to await Friday’s US employment report

Trading activity in Asia was still subdued due to China holidays. USDJPY struggled to add to yesterday’s gains and traded within a tight 103.34-103.60 band.

AUDUSD and NZDUSD slid. Wednesday’s strong US economic data releases have elevated expectations that the FOMC will raise US interest rates at the December meeting. An unexpected improvement in Australia’s Trade report was ignored by traders. The odds of a rate hike are 51.7% according to the CME FEDWatch tool.

In Europe, better than expected German Factory orders data (Actual 1.0% vs. forecast 0.2%) provided some solace to those believing that the German economy was slowing.  The news was enough to interrupt EURUSD’s slow drift lower.  The single currency jumped to 1.1208 from 1.1184 when the data was released but quickly retreated.

Sterling was unable to hang on to yesterday’s New York gains. GBPUSD traded erratically within a 1.2688-1.2760 range and started the New York session probing the overnight low. Economists and strategist can decide whether GBPUSD will correct higher or continue to target 1.00.

The oil price rally paused to consolidate and WTI traded within a $49.30-$49.89 range overnight.  The rally resumed once New York opened, cracking the $50.00/b barrier.

Prices are supported by yesterday’s EIA report that US Crude Stocks inventories declined by 3.0 million barrels. The Algerian oil minister added another layer of support to prices when said that Opec could cut production by an additional 1% in November.

This morning’s US jobless claims data came in at 249,000, missing the forecast for a gain of 254,000.  Canadian Building Permits soared to 10.4% in august from an upwardly revised 3.4% in July.  USDCAD has not reacted to either data release or the rally in WTI.

USDCAD technical outlook

The intraday USDCAD technicals are not a lot different from yesterday. They are bullish while trading above 1.3180 looking for a break above 1.3210 to extend gains to the 1.3250-80 resistance area.  A move below 1.3180 risks a steeper correction to 1.3040.  For today, USDCAD support is at 1.3170 and 1.3130.  Resistance is at 1.3230 and 1.3260.

Today’s Range 1.3140-1.3230