USDCAD is probing support at 1.3600 after rejecting an overnight attempt a breaking back above 1.3660. A rebound in oil prices is behind the move. WTI allied from a European low of $48.72 to $49.25 immediately after weaker than expected April US Housing Starts and Building Permits data. It quickly settled back to $49.05/barrel. The Easter/Passover holiday’s may have contributed to the weak data.
New York opened with only the commodity currency bloc and Sterling ceding ground to the greenback and those losses were negligible. That changed after the data and the US dollar has retreated across the board.
Overnight, Mr. Trump was behind another ball of confusion.
In a bit of a headscratcher move, traders used the excuse that President Trump may have leaked classified information to Russia, to buy EURUSD. The single currency climbed from 1.0975 to 1.1078 as of 1300 GMT.
Sterling spiked on the news and touched 1.2956 and then quickly dropped to 1.2870, erasing all the overnight gains. GBPUSD is sitting at 1.2900 as of 1300 GMT
USDJPY was very choppy, bouncing erratically inside a 113.26-113.78 range. It opened in New York at 113.56. Traders were torn between US rate hike expectations and concerns about Trump’s leaking of classified data.
In Australia, AUDUSD bounced within a 0.7400-34 range. Traders were focused on the release of the Reserve Bank of Australia policy meeting minutes which, not surprisingly, did not offer anything new.
NZDUSD trading tracked that of AUDUSD
Yesterday, the US Department of Energy predicted that shale production would increase 122,000 barrels/day next month, which stopped yesterday’s rally in its tracks. European traders ignored that news and aided by this morning’s broad US dollar weakness, WTI is trading at the overnight peak. The weekly API Crude inventory data is due at the end of the day which could determine whether WTI prices crack above $50.00/barrel.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish inside a descending channel bound by 1.3560 on the bottom and 1.3720 on the top. A break above 1.3720 will lead to 1.3850, while a move below 1.3560 will target 1.3530. However, the longer-term trend is still higher. For today, USDCAD support is at 1.3600 and 1.3560. Resistance is at 1.3660, 1.3690 and 1.3720
Today’s Range 1.3600-60
Chart: USDCAD 2 hour