USDCAD Overnight Range 1.2496-1.2557        

The Canadian dollar got back to 80 cents for a very brief moment, a level last seen in June 2015, powered by surging oil prices (WTI $46.52) and bearish US dollar sentiment vs. the majors. Month end USDCAD selling due to portfolio rebalancing flows helped the move.

However, the USDCAD selling has stalled despite the Canadian economic data releases coming in as expected. February GDP was -0.1% as expected and the news only had a minimal impact on USDCAD trading. The US data was also inline with expectations

Japan was closed for a holiday which made for a fairly subdued Asia session.  Still USDJPY continued to be the focus with traders wondering “how low can it go?”. The technicals are bearish and the Bank of Japan is not expected to intervene any time soon.

EURUSD had a good day during the European session, touching 1.1414 following a better-than-expected Q1 GDP report.  The gains were not sustained.  It is also the start of a long weekend for many traders which helped to curtail activity.

USDCAD will remain on the defensive until the month-end portfolio rebalancing flows dissipate after 8:00 am PST.  That could lead to a profit taking rally ahead of what is a long weekend in parts of Asia and Europe.

USDCAD technical outlook

The intraday USDCAD technicals are bearish below 1.2540 looking for a test of 1.2450 although there is minor support in the 1.2480-00. A break above 1.2550 may extend gains to 1.2620.  Longer term, USDCAD is in a downtrend below 1.2720 looking for a break of support in the 1.2440-60 area to extend losses to 1.1900. for today, USDCAD support is at 1.2480, 1.2450 and 1.2390. Resistance is at 1.2550, 1.2590 and 1.2620

Today’s Range 1.2480-1.2560

Chart: USDCAD Daily.