The Canadian dollar rocketed higher in Europe in concert with gains in AUD, and NZD in what appears to be just a wash-out of stale long dollar positions. For USDCAD, the move occurred despite news that Saudi Arabia pumped record amounts of oil in March and another rise in American crude supplies. (API data). The drop to 1.2390 (just after 6:00 am) occurred in a time not usually noted for deep liquidity.

The short term USDCAD uptrend is intact above 1.2400-10 and additional support seen in the 1.2340-60 area, however, the size of outstanding long USDCAD speculative positions makes it vulnerable to a deeper correction.

Elsewhere, the BoJ left monetary policy unchanged as expected and forecast inflation to hit 2% in 2015. GBPUSD soared on fall-out from the Shell/BG takeover. The FOMC minutes will be released at 2:00 pm which will merely re-affirm the doveish statement.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.2490 supported by the break below minor support at 1.2440 looking for a confirmed breach of the 1.2400-10 support area and a test of 1.2320. Below 1.2320 will lead to 1.2050 in a hurry. The short term uptrend from December is also being tested at 1.2400-10

Today’s Range 1.2390-1.2460