USDCAD Overnight Range 1.3088-1.3131                                              

The Loonie has been flapping its wings but going nowhere as it drifts aimlessly inside a narrow trading band.  Traders are patiently biding their time ahead of today’s Bank of Canada interest rate decision. (no change is unanimously expected)

Yesterday’s end of day American Petroleum Institute Weekly Crude Stocks change data reported a draw-down of 5.1 million barrels and WTI spiked higher, touching $49.45/b in overnight trading. USDCAD retreated from the 1.3140 closing level down to 1.3088 in Asia. A gentle slide in WTI prices in Europe lifted USDCAD back to 1.3132 in Europe.

Oil isn’t the only story driving USDCAD. The gaggle of Fed speakers that have been squawking for the past week or so are united in their claims that a June/July rate hike is not out of the question.

Asia FX markets were in “risk-on” mode.  Better than expected New Zealand trade data gave Kiwi a short lived boost and it has traded within a 0.0030-point range since then. AUDUSD has steadily drifted higher after hitting 0.7145 on Tuesday although the bias remains negative.  USDJPY continued to hover around the 110.00 area with trades seemingly unimpressed with reports that the VAT tax hike will be pushed back into April 2017.

“Risk-0n” carried on in Europe. European stocks were bought and oil prices stayed firm. Sterling managed to hang on to gains from yesterday’s Brexit poll results. EURUSD traded sideways.

In addition to the BoC interest rate decision, USDCAD traders will be waiting for the EIA Crude stocks report and looking for confirmation that yesterday’s API result wasn’t an anomaly. The US data cupboard is rather bare until tomorrow’s Durable Goods report.

USDCAD Technical Outlook

The intraday technicals are bearish while trading below 1.3130 and looking for a break of support at 1.3070 to extend losses down to 1.3020. However, the uptrend from the May 1.2462 low remains intact while trading above the 1.3060-70 area and it is looking for a break of 1.3220 to extend gains to 1.3450, although 1.3320 should be sticky.

For today, USDCAD support is at 1.3070 and 1.3030.  Resistance is at 1.3180 and 1.3220.

Today’s Range: 1.3070-1.3170

Chart: USDCAD 4 hours