USDCAD Range 1.3254-1.3346      

US Durable goods rose 2.0% in July, handily beating forecasts for a drop of 0.4% while Durable Goods, ex-transportation, gained 0.6% vs. expectations for a 0.4% gain. This is a volatile data series but the market needed a strong print to keep September rate hikes on the table. This helped but it probably isn’t enough.

Overnight, USDCAD, AUDUSD and NZDUSD all retraced some of yesterday’s gains in a much more subdued session than what has been the norm this week. At the same time, the US dollar recouped some of its losses against the other G-7 currencies.

Global equity market weakness continues to be the main driver of FX with a particular focus on Chinese equities. The Shanghai Composite (SHCOMP) closed down a mere 1.27% which in the context of recent moves, was a relief. The absence of another equity market meltdown has helped sooth jittery nerves, so far today.

For the balance of the day, equity market behaviour while dictate US dollar direction while the Canadian dollar has the added risk of additional oil price weakness.

Technical Outlook

The intraday technicals are bearish while trading below 1.3310 with the break of minor support at 1.3245 setting up a further drop to 1.3190.. If that level is broken, a retest of 1.3140 is likely. A break above 1.3310 would re-target 1.3350 and then 1.3450

However, the uptrend from June 22 remains intact while trading above 1.3130

Today’s Range 1.3170-1.3270

Chart: USDCAD 1 hour with downtrend and support noted