September 29, 2020
USDCAD open (6:00 am ET) 1.3359-63, Overnight Range 1.3358-1.3390
- Tonight’s Presidential debate sidelines FX traders
- Eurozone Economic Sentiment rises; German Inflation sinks
- European equities and Wall Street futures are lower.
FX Ranges at a Glance
Source: IFXA Ltd/RP
FX Recap and Outlook: The US dollar opened with minor losses compared to Monday’s close due to position adjustment ahead of tonight’s Presidential debate. AUDUSD and NZDUSD outperformed, and GBPUSD rallied on Brexit news. Asia equity markets were mixed. The Japanese Nikkei 225 ticked higher, Australia’s ASX 200 stock index closed flat while Hong Kong’s Hang Seng Index dropped 0.85%. European bourses are all lower, while Wall Street equity futures flit between positive and negative. Gold prices are higher thanks to the greenback’s retreat while oil prices a tad lower.
EURUSD got a minor lift after Eurozone Economic Sentiment Indicator rose to 91.1 from 87.5 in August. The single currency snapped a one-week downtrend at 1.1670 and rallied to 1.1714 in NY trading. German inflation data was a tad weaker than expected (actual -0.2% m/m vs previous -0.1% m/m). The technicals a modestly bullish and looking for a break above 1.1750 to shift the focus to 1.1900 However, geopolitical issues like the Armenia-Azerbaijan battle, and rising coronavirus cases in parts of Europe, may act as a drag.
GBPUSD rallied from 1.2836 to 1.2887 after news reports that the EU reportedly dropped demands for a broad agreement, if the UK agrees to detailed talks on fishing and state aid. However, Germany’s Europe Minister Michael Roth seemed to contradict the report. He wrote a letter stating that the EU cannot abide by the UK reneging on the Brexit deal.
USDJPY trade firmer as safe-haven trades were unwound. Further gains may be limited due to bearish technicals while prices are below 106.20.
AUDUSD and NZDUSD rallied with the shift to positive risk sentiment, with AUDUSD rising to 0.7122 from 0.7073.
USDCAD drifted aimlessly in a narrow 1.3358-1.3390 band. Price action continues to be dictated by broad US dollar sentiment, making the Loonie, “The Currency that Traders Forgot.”
Today’s US data, which includes Wholesale Inventories, S&P/Case Shiller Home Price Indices, and Consumer Confidence will have little impact on FX, as tonight’s debates will leave traders sidelined.
USDCAD Technicals: The technicals are bullish above 1.3190, looking for a break above resistance in the 1.3415-20 area to shift the focus to 1.3550. A break below 1.3290 targets 1.3230. For today, USDCAD support is at 1.3340 and 1.3310. 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