Overnight Range 1.3380-1.3431   

The Canadian dollar rally stalled following the release of StatsCan’s Retail Sales report. (Actual 0.6%, as forecast-Ex-autos 0.0% vs. forecast 0.5%). The knee-jerk reaction to the data saw USDCAD leap to 1.3431 from 1.3402. That move didn’t last albeit the retracement was a tad shallow.

The US dollar has pared back overnight losses in early New York trading. The move is primarily due to position adjusting/profit-taking ahead of Thursday’s Thanksgiving Day holiday with a dash of oil price weakness thrown in.

In Asia, the Japanese earthquake and threat of a tsunami shook up USDJPY.  The currency pair dropped to 110.25 and then rebounded to 111. 25 when the tsunami threat disappeared.  Profit taking pushed USDJPY back to 110.75 when New York started.

AUDUSD and NZDUSD were firmer in early Asia trading buoyed by the record closes on Wall Street.  Those moves ran out of steam.  AUDUSD has held on to its gains while NZDUSD is slightly lower than yesterday’s close.

In Europe, EURUSD recouped Asia losses and climbed to 1.0660 from 1.0602 due to a combination of higher equity markets, higher oil prices and a generally soft US dollar.

Sterling is the only G10 currency to have lost ground against the greenback.  GBPUSD traded sideways in Asia and dropped in Europe, undermined by on-going Brexit issues.  The Financial Times reported that Canada’s Finance Minister appeared to downplay UK hopes of a Commonwealth trading bloc.  “We are not talking as much about Brexit as you are in the UK.” Canadian Finance Ministers Bill Morneau in Financial Times interview. Source: FT

Oil prices extended Monday’s gains overnight, touching $49.17/barrel.  Traders bought crude on optimism that Opec and Russia will agree to production cuts.  That move ran out of gas and WTI has declined steadily. It hit $47.70 in New York before bouncing, modestly.

USDCAD is being undermined by general US dollar weakness and profit taking as traders trim positions

In a pre-Thanksgiving unwind of long USDCAD positions.  The US data is second tier and not enough to deflect attention from the US election result and Donald Trump’s fiscal stimulus plans.  This will be the last full day of trading in the US. On Wednesday, traders will be clogging the exits by lunch time in hopes of an early start to Thanksgiving, with many having booked Friday off as well.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while prices trade below 1.3450 looking for a break of minor support at 1.3380 to extend losses to 1.3340. A move below this levels sets up a steeper drop to 1.3250.  For today, USDCAD support is at 1.3380 and 1.3340.  Resistance is at 1.3420 and 1.3450.

Today’s Range 1.3340-1.3440

Chart; USDCAD 4 hour