Overnight Range 1.3111-1.3181
The FX markets opened in New York, mixed, and not that different from where they were at Friday’s close. The unchanged US Capacity Utilization data and slight uptick in September Industrial Production failed to give the greenback any support.
They didn’t start that way. The initial move during the first hours of the Asia session saw AUDUSD and NZDUSD lower in response to the positive US Retail Sales and Producer price reports.
However, after reviewing Fed Chair Janet Yellen’s doveish leaning speech from Friday afternoon, they soon cooled their enthusiasm. She saw benefits to running the US economy ”hot” for a period of time to spur faster growth and increase consumer spending and business investment
In Europe, EURUSD rebounded from the Asia low of 1.0962 but was unable to crack 1.1000. That changed in New York trading. Eurozone CPI data for September was as expected at 0.4%, core 0.5%, month over month.
GBPUSD chopped around in a 1.2950-1.2996 range. Brexit drama continues to dictate moves. On the weekend, Germany’s Chancellor Merkel and France’s President Hollande repeated that a “hard Brexit” is not compatitlbe with full and free access to the EU.
WTI oil prices are well below Friday’s $51.16 peak following the rise in the US rig count. Higher rigs imply increased US oil production which in turn would offset any planned Opec production cuts (or caps). WTI is hovering just above $50.00/b with a negative bias.
USDCAD continues to be pulled in opposite directions. Steady to firm oil prices have emboldened USDCAD bears while the prospect of higher US interest rates has bulls drooling.
Today’s FX market is unlikely to deviate too far from what was seen during the European session which is further consolidation, with a bias to buying US dollars. US equity futures suggest a lower stock market opening today.
The weather report is for hot air, and lots of it. GBPUSD will be watching for Monetary Policy Committee Ben Broadbent’s speech at 10:30 am EDT. Fed Vice Chair Stanley Fisher is speaking around noon and then the ECB’s Mario Draghi talks at around 1:30 pm.
USDCAD technical outlook.
The intraday USDCAD technicals are bearish while prices are below 1.3190 looking for a break of minor support at 1.3090-1.3100 to extend losses to 1.3040 and then 1.2990. A break above 1.3190 would put 1.3260 in play.
Longer term, the USDCAD uptrend from the May low remains intact while prices are above 1.2930. For today, USDCAD support is at 1.3110 and 1.3080. Resistance is at 1.3180 and 1.3205
Today’s Range 1.3090-1.3190