The Canadian dollar is under pressure and today’s domestic GDP data didn’t help. It didn’t hurt either. The 0.0% growth for February (m/m) was as expected. USDCAD gains are being driven by NAFTA trade talk concerns and President Trump’s threat to bail out of it all together as well as soft commodity prices and the risk of USDCAD demand from M&A activity.
The US dollar garnered a little support from the 0.8% rise in the employment cost index (0.3% was forecast) which supports higher US rates. US GDP was a tad weaker than expected.
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EURUSD has erased most of its gains from the mixed to better than expected German data and dropped to 1.0910 after the US reports. A higher than expected Eurozone inflation rate lifted EURUSD from 1.0857 to 1.0946.
Sterling traded in a narrow range in Asia and then rallied in Europe, despite soft Nationwide Housing Price data. GBPUSD rallied from 1.2890 to 1.2949, likely with a dash of month end demand helping the rally. It pared back those gains in post data, New York trading.
In Asia, USDJPY traders did not get excited about any of the large amount of data that was released, which included inflation, Retail Sales, and Unemployment. USDJPY traded sideways but climbed in Europe and added to the gains in New York.
The antipodean currencies traded lower in Asia but recouped their losses in Europe and opened in New York close to yesterday’s closing levels.
USDCAD Technical outlook:
The intraday and short term USDCAD technicals are bullish. The break above 1.3600, which was the previous 2017 high, and the move above 1.3650 yesterday suggest additional gains to 1.3837 the 61.8% Fibonacci retracement level of the 2016 range. A decisive break of that level will lead to the 76.4% level of 1.4162. For today, USDCAD support is 1.3605, 1.3570 and 1.3530. Resistance is at 1.3675 and 1.3750.
Today’s Range 1.3610-1.3710
Chart: USDCAD 1 hour