USDCAD Overnight Range 1.2280-1.2370  

USDCAD rejected additional topside moves in the 1.2370-80 area yesterday and dropped back below 1.2300 in early New York trading, taking direction from both the softer US dollar and firmer oil prices ($61.08). However, that move didn’t last. A US GDP report that was in line with expectations helped keep the focus on diverging US/G-7 interest rate paths and drove USDCAD back to yesterday’s peak. A break here would expose the March downtrend line to a test.

Politicians have hijacked the FX markets. Contradictory and inflammatory rhetoric, head-lines and sound bites have encouraged many traders to sit on the sidelines which has increased FX market volatility and reduced liquidity. Never a good mix.

Yesterday, Jerome Powell, a member of the Board of Governors of the FOMC said that he saw a 50/50 chance of a rate hike in September and another hike in December. This morning, a headline to the effect that “Tspiras says Creditors reject proposals” and news that the IMF submitted a counter-proposal to Greece containing tougher terms led to a choppy EURUSD session.

USDCAD technical outlook

The intraday USDCAD technicals are bullish.  The break above 1.2320 this morning negated the intraday downtrend.  USDCAD is probing resistance at 1.2370-80 representing the downtrend line from June which if broken, will extend gains to the 1.2490-1.2500 area .For today, USD support is at 1.2340 and 1.2280.  Resistance is at 1.2390, 1.2420 and 1.2450

Today’s Range 1.2340-1.2410

Chart: USDCAD daily with intraday and short term downtrends