Overnight Range 1.3227-1.3348    

USDCAD soared following the release of weaker than expected Retail Sales and CPI.  August Retail sales were expected to gain 0.3% with a risk that the result would even be higher. They weren’t

USDCAD smashed through the 1.3280-1.3320 resistance zone and reached an intrady peak of 1.3348.  Further gains are likely.

The US dollar managed to gain against all but Australian dollar and the Japanese yen overnight.

WTI oil has had a nice ride higher as well.

Asia traders extended EURUSD losses in early trading and took the single currency to 1.0894 before it bounced. USDJPY inched higher but stalled at 104.20 and dropped. NZDUSD was soft on concerns that Kiwi interest ratess may get cut in November, while US rates appear to be going higher.

In Europe, EURUSD dropped to levels that have not been seen since March but it has since recouped those losses. Mario Draghi’s press conference remarks, yesterday, suggesting that QE would not be abruptly cut, implied that the asset buying program would be tapered. “Lower rates for longer” thoughts led to the EURUSD downside pressure.

GBPUSD dropped in ragged trading falling from 1.2260 to 1.2207 in early New York action.

Oil prices ended their week-long downtrend in Europe when WTI punched above 50.50 and climbed to $50.95. Bullish comments from Russia’s oil minister and a reiteration of their promise to particpate in production caps, triggered the rally.

The Canadian dollar is on the defensive. Today’s weaker than expected Retail Sales and CPI reports combined with the Bank of Canada admission that rate cuts were discussed during the policy meeting have set the stage for additional USDCAD strength towards 1.3550.

USDCAD technical snapshot

USDCAD technicals are bullish the break above the 200 day moving average combined with today’s break above 1.3315 which was the 38.2% Fibonacci retracement of the 2016 range, hangs a target on 1.3570. Retracement should be limited to the 1.3220-60 area.  For today, USDCAD support is at 1.3310 and 1.3280.  Resistance is at 1.3380 and 1.3420

Today’s Range 1.3280-1.3380