USDCAD Overnight Range 1.3708-1.3840                    

USDCAD is starting the day well below its overnight peak in a fairly skittish overnight session, following a bounce in oil prices.  WTI is still off the overnight high but just the idea that Opec producers are talking gives rise to hopes that WTI will stabilize, if not rally.

It was a different sentiment in Asia. A much higher than expected USDCNY fix (Actual 6.5237 vs. forecast 6.5168) unsettled traders who then promptly bought yen as a safe haven. USDJPY declined to 113.38 from 114.38.  More comments (but a stale message) from Japanese PM advisor, Honda, of possible additional stimulus again, in March, were ignored.

European traders didn’t follow through on Asia’s risk -off sentiment.  There appears to be progress in the oil production cap talks with another meeting with Iran and Iraq scheduled today.  That news boosted both WTI and the Canadian dollar. Elsewhere, the UK employment report was mixed to positive and GBPUSD rallied although the gains were capped by on-going “Brexit” concerns.

There is a bit of US data today (Housing Starts, Building Permits and Producer Price Index) which, if better than expected may provide renewed support to the US dollar. At the same time, the fact that Opec is working on steadying the oil market should help the Canadian dollar offset some of the general US dollar strength.  However, that will just be the morning noise. The release of the FOMC minutes will be closely scrutinized to determine the degree of doveishness on the Committee.

USDCAD technical outlook

USDCAD continues to bounce within a 1.3700-1.400 trading band which has held since February 5. For today, the USDCAD technicals are bearish while trading below 1.3920, supported by the move below 1.3850 and refocussed on support at 1.3700.  A break of this level will extend losses to 1.3635 and then 1.3500.  A recovery above 1.3850 will shift the focus back to 1.4000   For today, USDCAD support is at 1.3770, 1.3730 and 1.3690.  Resistance is at 1.3830 and 1.3880

Forecast Range for the day 1.3760-1.3740

Chart USDCAD 4 hour