June 25, 2019

USDCAD Open (6:00 am EDT) 1.3174-77      Overnight Range 1.3173-1.3194

The gold rush days are here again. Investors are stampeding into the precious metal with the same unbridled enthusiasm as their forefathers did when gold was discovered at Sutter’s mill in California or in the Klondike region of the Yukon.

Gold (XAUUSD) soared to $1,439.09/oz overnight, a price last seen in May 2013,  after closing at $1,419.35 in New York.  Prices have been on a tear since the May 30 low of $1,283.03.  The rally has been fueled by the global central bank rush to ease, a broadly softer US dollar and rising geopolitical tensions.  The rally may have further to go.  Prices are in an uptrend $1,290.00.  The Break above $1,413.94 (50% Retracement of 2012-2015 range) targets the 61.8% Fibonacci retracement level of $1,501.31.

FX markets were choppy, overnight, and the US dollar opened in New York on a mixed note.  EUR and CHF lost ground while NZD led the rest of the G-10 major currencies a tad higher. The Canadian dollar opened unchanged.

USDJPY dropped in Asia, falling from 107.38 to 106.79, in part because of ongoing US/Iran tensions and falling US Treasury yields.  The 10-year Treasury yield dipped below 2.0% but clawed back the losses.

NZDUSD traded firmly ahead of the RBNZ policy meeting.  The central bank is expected to leave rates unchanged and issue a somewhat neutral statement.  AUDUSD lagged NZDUSD gains.

EURUSD and GBPUSD continue to chop about but with mostly positive biases.  GBPUSD sentiment is still dominated by the Tory leadership race and the risk of a prolonged Brexit.

USDCAD is under pressure from the mix of broad US dollar weakness and rising oil prices.  However, support in the 1.3130-50 area is slowing downside moves.

Traders are looking ahead to this morning’s US Consumer confidence and Housing market data.   Housing Prices are expected to rise 0.2% while Consumer Confidence may drop.  More importantly, Fed Chair Jerome Powell speaks just after lunch.  Traders expect him to reiterate the Fed’s dovish policy stance.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish while prices are below 1.3210, looking for a break below support in the 1.3130-50 zone to extend losses to 1.3090 and then 1.3040.  A move above 1.3210 targets 1.3280 and then 1.3350.  For today, USDCAD support is at 1.3150 and 1.3130  Resistance is at 1.3210 and 1.3240.  Today’s Range 1.3150-1.3220

Chart: USDCAD  4 hour