USDCAD Overnight Range 1.2645-1.2755   

USDCAD drifted aimlessly in a 1.2715-55 range with a mildly bullish bias until the release of today’s Canada Retail Sales and CPI reports. Surprisingly strong February Retail Sales (Actual 0.4% vs. forecast -0.8, ex-autos 0.2% vs. forecast -0.5%, m/m) powered USDCAD below minor support in the 1.2690 area to a low (so far) of 1.2645.  The move occurred on a corresponding bump in WTI prices that bounced from an overnight low of $43.0/barrel to $43.75/b.

USDJPY was the story just before European trading opened.  USDJPY caught a bid on a Bloomberg headline that said “BoJ Said to Eye Lending to Banks at Negative Rates”. USDJPY soared to 110.20 from 109.40 in a heartbeat and touched 110.73 in Europe. It is currently sitting at 111.33 (as of 6:15 am PDT) the high of the session, so far. That news sets the stage for an interesting BoJ meeting next Thursday.

EURUSD continued to consolidate in a narrow 1.1280-1.1310 post Draghi range until mid-morning in Europe when it broke minor support and dropped to 1.1250. A doveish Mario Draghi was not doveish enough for FX traders and EURUSD remains rangebound.

USDCAD will be ending the week on a bearish note.  The strong Canadian economic data combined with stable to rising oil prices should see further weakness and a test of the psychologically important 0.80 cent CAD level (1.2500) in the coming days.

USDCAD technical outlook

The intraday USDCAD technicals are bearish following the break of support in the 1.2690-1.2710 zone looking for additional weakness below minor support in the 1.2650 level to extend losses to 1.2500. A move above 1.2790 is needed to negate the short term downward pressure.  For today, USDCAD support is at 1.2640, 1.2590 and 1.2550.  Resistance is at 1.2690, 1.2720 and 1.2760.

Today’s Range 1.2610-1.2690

Chart: USDCAD  30 minute