USDCAD Overnight Range 1.2969-1.3066                        

USDCAD has recovered almost half of its losses that occurred yesterday, when WTI rallied to $50.21/barrel. FX markets were rather tame in Asia.  Perhaps traders were distracted by the G7 meeting in Japan. That august body apparently couldn’t agree on the global economic outlook but acknowledged “downside risks”. There was zero FX impact from the G7 communique. Japan CPI data was the main focus and it was a tad better than forecast. This mornings US data had minimal impact due to the Janet Yellen speech later today.

FX markets got livelier during the European session and the US dollar was bought.  The Canadian dollar led the pack, lower.  The US dollar move was likely due to additional position adjustment ahead of Janet Yellen’s speech this afternoon.  Markets are looking to the Fed chair to validate the barrage of hawkish commentary from various Federal Open Market committee members and set the table for a June or July rate hike. If the speech is deemed to be “disappointing” or worse, “doveish” the US dollar will take it on the chin and erase all of its recent gains.

Monday is a holiday in the US (Memorial Day) and in the UK (Bank holiday) which means liquidity will evaporate rapidly, after this mornings data.

USDCAD technical outlook

The Intraday USDCAD technicals are bullish while trading above 1.3010 looking for a break of the 1.3050-60 zone to extend gains to 1.3200.  A move below 1.3000 will lead back to 1.2900 which is also uptrend support from the May 2, 1.2462 low.  A move below 1.2880-1.2900 would extend losses to 1.2500.  for Today, USDCAD support is at 1.3010 and 1.2960.  Resistance is at 1.3060 and 1.3120

 Today’s Range 1.3020-1.3120

.Chart: USDCAD 30 minutes