USDCAD open (6:00 am ET) 1.2695-99, Overnight Range 1.2677-1.2709, Previous Close 1.2693
FX Ranges at a Glance:
Source: IFXA Ltd/RP
Equity prices and Buzz Lightyear think they are heading “to infinity and beyond.” The Shanghai Shenzhen CS! 300 soared 2.14%, leading Asia equity indexes higher, as traders stock up on stocks ahead of Chinese New Year, which starts Friday and goes until Feb.19.
European equity indexes are modestly lower except for the UK FTSE 100, which gained 0.25% (6:15 am ET). Wall Street futures are pointing to a higher open, as equity traders continue to dine out on Biden’s stimulus plans. Gold prices are modestly higher, and oil prices extended recent gains.
Fed Chair Jerome Powell speaks to the Economics Club of New York this afternoon. He is expected to repeat that the Fed will leave interest rates low for a long time and that time, by the way, is no time soon.”
US dollar bears are in the driver’s seat. The steep plunge in the number of new COVID-19 cases in the US (7-day average 108k) and the increase in vaccinations, combined with the Biden $1.9 trillion stimulus package, has boosted positive risk sentiment.
EURUSD continued to March higher, reaching 1.2143 in Europe, before drifting down to 1.2125 in NY. Traders did not seem concerned about reports Germany may extend COVID-19 lockdowns until March 14, or the ongoing Italian political drama. German January CPI was 1.6% y/y, as expected.
GBPUSD marched higher, rising from 1.3804 to 1.3855. the gains were driven by broad US dollar, weakness, expectations for a robust UK economic recovery and last week’s somewhat upbeat Bank of England economic outlook. The GBPUSD technicals are bullish above 1.3460, looking for a break above 1.3890 to extend gains to 1.4050.
USDJPY traded lower, falling from 104.56 to 104.52 in Asia than popped to 104.83 in early NY trading. The gains were supported by 10-year Treasury yields which ticked up to 1.16% from 1.4% and renewed. The longer-term USDJPY technicals are bearish and looking for a break below 104.40 to extend losses to 103.50.
The AUDUSD and NZDUSD rallies stalled in Europe. AUDUSD retreated from 0.7752 and dropped to 0.7733 at the open, due to profit-taking ahead of minor resistance.
Oil prices extended this week’s gains. The American Petroleum Institute reported US crude inventories shrank again, last week, which underpinned prices overnight. Traders expect even higher prices as pent-up global demand outstrips supply,
USDCAD dropped alongside the G-10 majors but erased most of the losses just before NY opened. Hopes for a global economic rebound, broad US dollar weakness, rising crude prices, and bearish technicals weigh on prices.
USDCAD Technicals: The intraday technicals are bearish below 1.2730, looking for a break below 1.2670 to extend losses to 1.2590. Longer term Fibonacci analysis projects a test of 1.2675, which is the 76.4% retracement level of the 1.2065-1.4650 range between September 2017 and March 2020. For today, USDCAD support is at 1.2670 and 1.2620. Resistance is at 1.2730 and 1.2770 Today’s Range 1.2660-1.2710.
Chart: USDCAD 4 hour
Source: Saxo Bank
FX open (6:00 am EDT) High, Low, and previous close
Source: Saxo Bank