USDCAD open (6:00 am ET) 1.2736-40, Overnight Range 1.2698-1.2754, Previous Close 1.2704
FX Ranges at a Glance-NY close until NY open
FX Ranges at a Glance-Monday NY open until Friday NY open
FX Recap and Outlook:
The Chinese Lunar New Year holiday started and runs until February 19, which sapped FX liquidity in Asia.
Profit-taking is the theme today, ahead of a long weekend break in the US (Presidents Day) and Canada (Family Day).
European equity indexes are flat to lower but higher than they were earlier in the session. Wall Street futures are a tad softer after the S&P 500 closed a record high. Gold and oil prices have also dipped. The Wall Street Journal reports that forecasters have raised 2021 US GDP growth forecasts to 4.9% from 4.3% in January, on average.
Bitcoin (BTCUSD), continues to bask in the glow of news that Tesla bought $1.5 billion. The cryptocurrency got another boost after Bank of New York Mellon said it planned to transfer, store and issue digital assets. Mastercard got into the act saying it would support some cryptocurrencies. BTCUSD touched $48,925.53 overnight, before sliding to $47,778.00 at the NY open.
EURUSD traded sideways in Asia then slipped in Europe, falling from 1.2134 to 1.2098. European economic data was not an issue. Mario Draghi is expected to become Prime Minister of Italy today. The EURUSD technicals are bullish above 1.2070, looking for a break of the 1.2150-70 area to extend gains to 1.2250.
GBPUSD suffered from a bout of ugly, but stale GDP data, and profit-taking. UK GDP dropped 9.9% in 2020. The last time that happened, the North West company, and “the Governor and Company of Adventurers of England trading into Hudson Bay,” competed for what today is called “Canada.” Traders looked past the data and ignored an EU forecast that Brexit will cost the UK 2.25% of GDP compared to 0.5% for the EU.
USDJPY popped above 105.00, reaching 105.17, after 10-year US Treasury yields climbed to 1.165% from 1.135%. Pre-weekend profit-taking underpinned demand.
AUDUSD and NZDUSD sank under the weight of broad US dollar strength. AUDUSD also suffered from news that the Victoria region was under a five-day COVID-19 lockdown.
USDCAD rallied steadily, taking direction from broad US dollar action.
Traders do not care about domestic data or politics, and currency moves are at the whim of global risk sentiment.
USDCAD Technicals: The intraday technicals flipped to bullish yesterday after prices failed to take out support in the 1.2650-660 area and subsequently rallied above minor resistance at 1.2710. The rally is merely a correction if the November downtrend line which is at 1.2810 remains intact. For today, USDCAD support is at 1.2710 and 1.2670. Resistance is at 1.2750 and 1.2790 . Today’s Range 1.2690-1.2760.
Chart: USDCAD daily
Source: Saxo Bank
FX open (6:00 am EDT) High, Low, and previous close
Source: Saxo Bank