USDCAD Overnight Range 1.3627-1.3678

The world is awash in oil and the Loonie is drowning it. Brent futures dropped another 2% overnight and touched $38.90. The outlook for oil took another turn for the worst when the International Energy Agency forecasted that global over-supply of crude would continue until the end of 2016. Down went oil and up went USDCAD in a steady climb to 1.3678.

The lack of actionable US economic data this week and on-going fall-out from last weeks ECB and Opec meetings has left traders as skittish as Ontario Premier Wynn near a lie –detector. Events in South Africa spooked some traders who fear contagion from another emerging market crisis. News that South Africa President Jacob Zuma replaced the finance minister with a totally unqualified candidate wasn’t received very well.

This mornings US data was met with a collective yawn. November Retail Sales was mixed to strong. The headline number was below forecasts (Actual 0.2% vs. forecast 0.3% m/m) but Core beat expectations. (Actual 0.4% vs. forecast 0.2% m/m)

USDCAD moves remain tied to WTI moves and both could be vulnerable to a week-ending, profit taking correction.

USDCAD technical outlook

The USDCAD technicals are bullish looking for a continuation of the rally to hit 1.3770 and then 1.4000. For today, the USDCAD uptrend remains intact while trading above 1.3640. A move below 1.3640 will see a retest of 1.3570 which is well above the October uptrend line of 1.3380. For today, USDCAD support is at 1.3630, 1.3610 and 1.3570. Resistance is at 1.3680, 1.3720 and 1.3790.

Forecasted Range for the day 1.3610-1.3710

Chart 4 hour with correction area noted