USDCAD Overnight Range 1.2486-1.2530          

USDCAD has edged higher on softer oil prices and the release of modestly stronger US data this morning (US personal income rose 0.3 %.). Wednesday’s Bank of Canada interest rate decision is the major risk event for the Loonie this week.  The Bank of Canada governor has been contradicting himself since the January rate cut and he could go either way.  Even if he doesn’t move on rates, a doveish or hawkish statement would create turmoil.

This weekend’s rate cut in China (1 yr depo cut by 0.25 bps to 2.5%, 1 yr lending rate cut to 5.35) was widely telegraphed but still caused a stir among Aussie and Kiwi traders. Initial rallies were short lived and reversed ahead of the RBA rate decision on Tuesday which is at best, a coin toss as to whether or not they cut rates by 0.25%. EURUSD bounced off the overnight lows despite a mixed bag of PMI data.

USDCAD technical Outlook

The intraday USDCAD technicals are mixed: bearish below 1.2440-60 and bullish above 1.2540-60. In the short term, the USDCAD uptrend from the beginning of January remains intact above 1.2420-40 but needs to break resistance in the 1.2560 area to extend gains. For today, USD support is at 1.2480 and 1.2450.  Resistance is at 1.2530 and 1.2560

Chart: USDCAD daily with short term uptrend noted