USDCAD   Overnight Range 1.2668-1.2764        

A weaker-than-expected Canadian Building permits report today (down 14.5% in May vs. forecast of -5%) piled on top of a series of weak data (GDP, PMI and Trade) while oil prices slide has triggered broad-based buying of USDCAD. A global bout of risk aversion on the back of rising Greek risks and the China equity market melt-down haven’t helped matters, either.

It was a sloppy overnight session in FX land. Asia woke the Giant Panda and the bear went on a tear. The Chinese stock market crashed again.  The CSI300 index closed down 6.8% while the Shanghai Composite index was down 5.9%. Over 40% of listed firms have halted trading to prevent further losses as Chinese equities have lost over 30% of their value since mid-June. Beijing has attempted to stabilize the market by implementing various measures.  China Securities Finance Corporation (CSFC) has reportedly asked the PBoC for $500 billion yuan (Around US$80.0 billion) to provide liquidity. That news served to halt the rout, at least for today.

The China equity rout combined with rising fears that the good ship Greece was heading for the rocks fueled demand for JPY as a safe haven trade. Both AUDUSD and NZDUSD tanked as well but mid-day in London, all three currencies were well off their lows

Greece has taken a back seat so far today as the EU and friends discuss the next steps for Greece. It should be a fairly subdued session until 2:00 pm EDT when the FOMC minutes get released. With all the other turmoil in the world, worrying about the timing of a widely telegraphed ¼ point hike by the Fed makes no sense.

The FOMC minutes will be released today with traders hoping to find proof that US rates are really going up.  That may be hard to come by and the US dollar could suffer.

Technical Outlook

The intraday technicals are bullish while trading above 1.2680 looking for a break of minor resistance in the 1.2760-80 area to extend gains to 1.2850. A move below 1.2680 will negate the short term pressure and lead to further losses down to 1.2640.  For today, USDCAD support is at 1.2680, 1.2640 and 1.2610. Resistance is at 1.2730, 1.2770 and 1.2820

Today’s Range 1.2690-1.2780

Chart: USDCAD 1 hour with uptrend and support shown