USDCAD Overnight Range 1.2756-1.2838              

The Canadian dollar is the flavour of the day and that flavour tastes like oil. Yesterday’s end of day American Petroleum Institute data showing a draw-down of 2.38 million barrels did not have much impact with WTI sitting at $50.48/barrel, in part because a draw-down was expected. What changed was the China Trade data. China crude imports showed the largest May over May jump in six years. That news added to the API data and on-going Nigerian supply disruptions squirted WTI to a peak of $51.20.  Traders took note and sold USDCAD from 1.2725 to 1.2669

The Asia session was all about Japanese data. The second estimate of Japan’s Q1 GDP was revised up to 1.9% q/q from 1.7% and USDJPY was sold from 107.30 to 106.73. It spent the rest of the overnight session in a 106.73-107.30 range. The other news was from China.  China’s May Trade surplus widened to $45.656 billion while exports shrank 4.1%

There wasn’t a whole lot going on in Europe.  Sterling trading is all about Brexit polls and ignored an uptick in UK Manufacturing. (Actual 2.3% vs. forecast 0.0%).   EURUSD appears quite content in the 1.1330-80 area.

Canada Housing Starts (Actual 188.6k vs. forecast 190.0k) and Building Permits (Actual -0.3% vs forecast 1.5%) were a modest negative for the currency but nothing that won’t be forgotten in a couple of hours.  USDCAD moves will continue to be driven by WTI prices.  Today’s EIA Crude stocks data could be the catalyst to launch WTI to $53.00/barrel

USDCAD Technical outlook

The USDCAD techncals are bearish following the break of support at 1.2960 with the downtrend intact below the 1.2730-50 area. A move below 1.2660 will lead to a quick drop to 1.2462, the May 2016 low. USDCAD needs to recover above 1.2770 to negate the downward pressure.  For today, USDCAD support is at 1.2660, 1.2580 and 1.2510.  Resistance is at 1.2740 and 1.2770

Today’s Range 1.2610-1.2710

Chart USDCAD hourly

june 8th