November 12, 2019

USDCAD open 1.3248-52 (6:00 am EST)    Overnight Range 1.3232-1.3254

GBPUSD was the life of the party in a holiday-thinned New York and Canada session yesterday, in an otherwise dull session.   Overnight, FX highlights are hard to find.  Traderss are indecisive ahead of President Trump’s speech to the New York Economics Club, scheduled for noon.

The US dollar inched higher against the G-10 majors led by a drop in the New Zealand dollar.

 FX Market Snapshot Daily

Change in currency value against the US dollar from Mon. NY open to Fri. NY open 

FX traders are hoping to glean some direction from President Trump’s speech. There is plenty of speculation that Trump will announce the delay of tariffs on European auto imports while putting a positive spin to the China trade negotiations. However, Trump is prone to hyperbole, suggesting the speech will be long on superlatives and short on actionable facts.

GBPUSD dropped from 1.2865 to 1.2817, erasing all of yesterday’s gains. They occurred when Brexit Party leader Nigel Farage said he wouldn’t run 317 candidates in Conservative ridings. Ho-hum, there are still concerns that Boris Johnson may not win a majority. Today, broad US dollar strength and soft UK data weighed on prices. UK employment data disappointed. October unemployment rose by 33,000 rather than the 21,000 forecast.

EURUSD drifted lower and broke below the overnight low in early New York trading, touching 1.1012. They believe that Trump’s speech will be positive and boost USD economic growth while at the same time, Eurozone growth is struggling, is undermining the single currency.

USDJPY can’t get traction in either direction. Buyers are lurking in the 108.70 area while sellers haunt the 109.50 zone. Choppy US bond price action left 10-year Treasury yields bouncing in a 1.92%-1.954% range.

NZDUSD was the weakest G-10 currency pair overnight. New Zealand inflation expectations were 1.8%, which knocked NZDUSD down from 0.6365 to 0.6327. The data supported calls that the RBNZ will cut rates tomorrow. Some analysts suggest that a form of quantitative easing may be on the table.

AUDUSD followed NZDUSD lower, as broad-based US dollar demand offset the improved, but second tier, Business Confidence data.

WTI oil prices are underpinned by hopes for some kind of US/China trade deal which reinvigorates global crude demand.

USDCAD is trading with broad US dollar sentiment. The currency won’t find any direction from domestic economic data this week because what is available is limited and second tier. Instead, US dollar sentiment, technicals, Wall Street, and the debate about Don Cherry getting fired will provide the distraction.

There are no economic reports of note. Fed speakers include Richmond Fed President Thomas Barkin and Philadelphia Fed President Patrick Harker but he headliner is Trump at noon.

USDCAD Technical View

The intraday USDCAD technicals are bullish while prices are above 1.3190, a level guarded by support at 1.3210. The break above 1.3240 resistance, which capped rallies since October 14, was broken yesterday, and suggests it will revert to support ahead of a probe of downtrend and 200-day moving average resistance in the 1.3280-90 area. For today, USDCAD support is at 1.3220 and 1.3190. Resistance is at 1.3260 and 1.3290. Today’s Range 1.3220-1.3290

Chart: USDCAD daily

Source: Saxo Bank