USDCAD Range 1.3082-1.3120        

USDCAD sank and then soared following the release of the slightly worse-than –expected US CPI data which didn’t do anything to change the 50/50 odds of a September hike by the Fed. In fact the data was almost instantly forgotten as Loonie traders reacted to a further retreat in WTI prices, which are well off their overnight high.

USDCAD traded erratically in Asian, albeit in a very narrow range with traders looking for direction and nervously watching the roller coaster that is Mr. Yuan’s Wild Ride. Key Chinese equity indices dropped about 3% before a “buyer” emerged.  The indices closed with a 1% gain.

It should be a rather dull session until 11:00 am PST when the FOMC minutes are released. Those looking to the minutes to provide further evidence of a September rate hike will surely be disappointed which will leave the existing FX ranges intact well into next week.

Technical Outlook

The intraday technicals are bullish after snapping the downtrend line at 1.3080 which opens the door to further gains toward 1.3200. However, a retreat below 1.3050 would lead to a test of support in the 1.2990-1.3010 zone.  For today, USDCAD support is at 1.3050 and 1.3020.  Resistance is at1.3110 and 1.3140.

Today’s Range 1.3050-1.3130

Chart: USDCAD hourly with break of downtrend noted.