Picture: European Parliament

September 28, 2020

USDCAD open (6:00 am ET) 1.3388-92, Overnight Range 1.3364-1.3402

  • GBPUSD soars as FT says “signs of progress”
  • EU officials continue to warn of currency strength issues
  • Expect FX chop from Presidential debate Tuesday, Month-end Wednesday

FX Ranges at a Glance 

Source: IFXA Ltd/RP

FX Recap and Outlook:  Brexit news gave GBPUSD a lift while knocking the UJS dollar down against the major currencies.

An FT article citing progress in the Brexit talks and suggesting that UK Prime Minister Boris Johnson was eager for a deal, caught GBPUSD traders “short.”  GBPUSD climbed from 1.2753 in Europe to 1.2929 in early NY trading before drifting back to 1.2892.  The break above 1.2810, snapped the September downtrend and a break above 1.2900 targets 1.2970.

EURUSD mirrored GBPUSD moves.  The single currency was steady during the Asia and early European sessions, but prices rallied with the Brexit story.  ECB official continue to talk about the need for more monetary stimulus and concerns about the impact of the exchange rate on inflation. Euro-area data was second tier and as expected.  The short term technicals suggest the EURUSD rally is just a correction while prices are below 1.1705.

USDJPY drifted lower on the back of ongoing coronavirus concerns, Japanese half-year end yen demand, and caution ahead of Tuesday’s Presidential debate.

AUDUSD and NZDUSD bounced along with the Brexit-caused US dollar sell-off.  AUDUSD got an added lift when Westpac economists changed their forecast for the next RBA rate cut.  Last Thursday they precited a rate cut on October 6.  Today, the changed the forecast to November.

Asia stock markets closed with gains.  European indexes and S&P 500 futures are higher, while Gold and Oil prices are down.

USDCAD peaked at 1.3401 as European opened but dropped 1.3364 in NY, on the back of broad US dollar weakness.  News that the NDP party supported the Liberal Throne Speech, preventing an election was expected.  Another election would likely result in the NDP  losing their status as an official party.

USDCAD Technicals: The technicals are bullish above 1.3180, looking for a test of the downtrend line from March which comes into play in the 1.3450-60 area which is also where the 100 day moving average resides. For today, USDCAD support is at 1.3340 and 1.3280.  Resistance is at 1.3410 and 1.3450. Today’s Range 1.3330-1.3410

Chart: USDCAD daily

Source:  Saxo Bank

FX open (6:00 am EDT) High, Low, and previous close

Source:  Saxo Bank