Overnight Range 1.3166-1.3273
The Loonie bounced off the walls like a toddler in a bouncy castle overnight. At one point, USDCAD touched 1.3273 after triggering stops above 1.3250.
The Clinton/Trump debate was the focus in Asia markets and NAFTA was an issue. Trump puckered his lips like a catfish on a sand-bar while shouting “Worst Deal Ever”. Hillary smiled and thought “Gee, I’m going to be president.
When the dust had settled the media declared Clinton the victor and USDCAD retreated to 1.3166.
Bank of Canada Governor, Stephen Poloz didn’t offer any fresh insight into monetary policy in his speech at Western Washington University.
Later on, the news from Algiers wasn’t all that great. Saudi Arabia reminded oil traders that the meeting was merely a consultative process and oil prices fell. That was enough for USDCAD bulls to re-buy the currency.
Elsewhere, USDJPY traders liked what they saw in the debate while European traders didn’t care.
USDJPY recouped all of Monday’s losses in Asia but that move didn’t last and by mid-morning in Europe, it was back to Monday’s closing level.
EURUSD was sidelined in Asia and a European attempt to push the single currency above 1.1258 failed, although the retreat was very shallow. GBPUSD rallied to 1.3006 in Asia on a bit of a short squeeze and then retreated back to 1.2955 in Europe.
USDCAD started the New York session at 1.3215 but falling oil prices and some concerns that the BoC could cut rates boosted the currency pair back to the overnight peak.
FX markets will be vulnerable to headlines today. The Opec meeting is still going on which leaves WTI exposed to price swings, and by default USDCAD. Federal Reserve Vice chairman Stanley Fisher is speaking at noon and could remind markets that US rates may rise in December. The US releases the API weekly Crude stocks change report at the end of the day.
USDCAD technical outlook
USDCAD technicals are bullish while trading above 1.3170 supported by last week’s break on minor resistance at 1.3080. A break above the 1.3270-90 area will set the stage for test of 1.3450. For today, USDCAD support is at 1.3170, 1.3140 and 1.3080. Resistance is at 1.3250-70, 1.3290 and 1.3330.