USDCAD Overnight Range 1.3227-1.3325  

USDCAD and WTI hooked-up again after a few days of ignoring each other. The Loonie had ignored the slide in oil prices this week up until today. WTI oil prices dropped below support in the $42.70-$43.00/barrel area and USDCAD powered through resistance in the 1.3290-1.3310 area.   It didn’t help matters that the US dollar was rising across the G-10 spectrum, either. There isn’t a whole lot of support for WTI until the $39.85 which suggest USDCAD upside toward 1.3370.

The Australian dollar is defying gravity and low commodity prices. It staged an impressive rally overnight, on news of a sizable employment gain (58.6k). Numerous analysts and strategist warn that this data series is unreliable but AUDUSD traders don’t care and the currency has held on to its gains.

In Europe, Mario Draghi reiterated his concerns with the Eurozone and inflation in a speech to the European Union Parliament and Monetary Affairs Committee.  He didn’t say anything new but his remarks reminded markets that the ECB is likely to embark on another round of stimulus in December.  EURUSD dropped and additional downside is likely.

It is an FOMC member chin-wag today. No less than 5 officials, including Janet Yellen, will be at podiums across the country leaving FX markets vulnerable to headlines. Today’s US and Canadian data releases were as expected

USDCAD technical outlook

The intraday USDCAD technicals are bullish with this morning’s break above the downtrend line from the November 6 peak. A move above that top will extend gains to the 1.3380-1.3400 area with the 2015 high of 1.3455 lurking just behind.  The rally is supported by the drop in WTI. USDCAD had ignored WTI movements for the past couple of day’s but is now back in lock-step. For today, USDCAD support is at 1.3270 and 1.3240.  Resistance is at 1.3340 and 1.3380

Forecast Range for the day 1.3290-1.3370

Chart USDCAD 1 hour with Oil overlay