USDCAD Overnight Range 1.2215-1.2283    

USDCAD succumbed to the pull of gravity overnight and dropped back from 1.2285 to test support at 1.2215 as yesterday’s US dollar buyers became today’s US dollar sellers. News that the Canadian government is touting a balanced budget in 2015-16 had nothing to do with the Loonies gains.

Overnight, Australia got the ball rolling when CPI beat the estimates (Actual 0.2% vs 0.1%).  AUDUSD headed higher and got further support from a report that the PBoC could cut the RRR again. The Nikkei closed above 20,000 but USDJPY hardly seemed to notice.

The US dollar retreat continued in Europe.  The headlines about Greece were a tad less inflammatory which may have helped. GBPUSD leapt higher, in part due to the BoC minutes appearing ever so slightly hawkish and also on position adjustment ahead of the election.

Today’s US Housing Price Index met expectations and was ignored. The G-7 currencies are likely to continue trading choppily within the confines of this week’s trading band, at least until Friday’s US Durable Goods report.

USDCAD technical outlook

 The intraday USDCAD technicals are bearish while trading below 1.2270 looking for a break of minor support at 1.2180 to extend losses to 1.2110. A move back above 1.2280-90 targets 1.2310 and then 1.2340

Today’s Range 1.2210-1.2270

Chart: USDCAD hourly with intraday downtrend