USDCAD Overnight Range 1.3910-1.3993          

This mornings Canadian CPI data was below expectations and snapped a modest and shallow Loonie rally. USDCAD had drifted down to 1.3935 ahead of the data but jumped to 1.3993 afterwards.  Resistance, profit taking and a slight bounce in WTI has seen the currency pair drift back to the middle of the day’s range.

It was a quiet overnight session. USDCAD got a respite following Thursday’s frantic activity and basically flat-lined in Asia. European traders saw oil prices tick higher and sold USDCAD.  That move was short lived. Oil prices retraced lower when New York walked in and that set the dogs on the Loonie. USDCAD rallied back to within spitting distance of the psychologically important 1.4000 level.

The yen was the talk of the town.  The Bank of Japan “tweaked” their quantitative easing program by extending the maturity of its JGB purchases. The BoJ governor insisted that today’s change wasn’t additional easing and that the BoJ would meet its inflation target in the second half of 2016. Predictably, USDJPY reacted unpredictably. It spiked to 123.50 from 122.30 and then dropped to 121.10 where it sits now.

The European session was a little more subdued although EURUSD was choppy within the 1.0800-1.0900 range.

This is the last full week of trading in 2015 and it is likely to get very quiet after 9:00 am PST as traders get an early start on the weekend and holidays.

 USDCAD technical outlook

The intraday and short term USDCAD technicals are bullish. Yesterday’s decisive break of 1.3850 opened the door to 1.4050 and then 1.4250. The hourly chart set-up is also bullish.  Only a move below 1.3850 would negate the short term upside pressure and suggest 1.3790-1.3990 consolidation.  For today, USDCAD support is at 1.3900 and 1.3850.  Resistance is at 1.4000 and 1.4050

Forecasted Range for the day 1.3910-1.3990

Chart USDCAD daily