USDCAD Overnight Range 1.3773-1.3858        

Oil is under pressure and FX traders are jumpy. USDCAD opened at 1.3815 and has traded in a 1.3815-1.3850 band this morning. Traders may be dreading the Energy Information Administration release of the weekly EIA Crude Stocks report; in case it confirms yesterday’s American Petroleum Institute (API report of a large 7.1 million barrel build in inventories. That news, coupled with the Saudi and Iran oil ministers scoffing at oil production caps, yesterday could put WTI in a tailspin and drive USDCAD higher.

Brexit issues are the only story for GBPUSD traders and they do not like what they are reading. GBPUSD was sent tumbling when the UK walked in.  A minor bounce in early New York trading was short lived and GBPUSD is offered. EURUSD broke below support at 1.1000 and tested the 100 day moving average at 1.0950, which held.  However, the subsequent bounce lacked intensity and couldn’t get back above 1.1000. US Markit Services and Composite PMI’s were on the soft side which undermined the US dollar.

Federal Reserve Vice Chairman, Stanley Fischer sounded slightly more hawkish in a speech late yesterday, saying that it is too early to assess the implications of recent volatility.  His remarks had no impact on FX. Meanwhile, the head of Germany’s Deutsche Bundesbank was warning the ECB about further easing of monetary policy. His remarks may temper the enthusiasm of EURUSD bears.

Global equity indices are all in the red as are New York indices in part due to the lower oil prices and in part due to general unease about global markets.

USDCAD technical outlook

The intraday USDCAD technicals are bullish and in an uptrend while trading above 1.3770 supported by the break of the downtrend from January 21. The near target is now 1.3890-1.3910 which, if broken clears the way to a retest of the 1.4000 area. A move back below 1.3770 would negate the topside pressure and suggest further 1.3650-1.3950 consolidation.  For today, USDCAD support is at 1.3810 and 1.3770. Resistance is at 1.3870 and 1.3930

Forecast Range for the day 1.3790-1.3890

Chart USDCAD 4 hour