USDCAD Overnight Range 1.2560-1.2640
USDCAD popped higher in early New York trading when traders returning from their long weekend took note of WTI prices pushing through the 38.2% Fibonacci level of the March-June range ($54.44) and trading at $54.22.Wti has since bounced back to $54.60/bbl but the Loonie has ignored the move. Last week’s reports of rising crude inventories combined with the looming possibility of the end of sanctions on Iran increasing oil supplies and renewed economic growth concerns for China, has put downward pressure on oil and the Canadian dollar.
Greek’s gave the middle finger to additional austerity, voting a resounding “No” in the referendum while giving their Prime Minister a new mandate to negotiate with creditors. The Finance Minister, Varoufakis, resigned as he is seen as a barrier to effective negotiations. EURUSD behaved much the same as last week, when Greece announced the referendum. It tanked in Asia and then recouped all of its losses in early European trading. However, the dollar has since drifted higher and has gained against all the G-10 currencies.
The Greek drama will continue to play out over the next couple of weeks with news from EU meetings a key driver for EURUSD trades. Meanwhile this week’s FOMC minutes will attempt to grab some of the spotlight.
USDCAD will remain bid, especially if oil prices continue to head lower. Since Canadian dollar sentiment is negative, a worse-than expected Ivey PMI print will have a bigger impact than a better than expected result.
USDCAD Technical Outlook
The intraday technicals are bullish while trading above 1.2580 looking for a break of 1.2630 (recent high) to extend gains to 1.2670 and then 1.2820. (2015 peak). A move below 1.2580 suggests a drop to 1.2530. The short term outlook is bullish above 1.2480.
Today’s Range 1.2590-1.2660
Chart: USDCAD 4 hour with new range