USDCAD Overnight Range 1.3135-1.3235              

USDCAD is on a tear in an otherwise dull FX market. WTI oil prices broke through support at $43.30/barrel and dropped to $42.74 before bouncing but that was enough to drive USDCAD through resistance in the 1.3190-1.3210 area and touch 1.3225.The oil glut and storage constraints continue to weigh on prices with unseasonably warm temperatures in parts of the US getting some of the blame.

This morning’s US Durable Goods report was weak. Durable Goods Actual -1.2% vs. forecast -1.5%, ex-transportation -0.4% vs. Forecast 0.).However the EURUSD reaction was fairly subdued and the post data rally was quickly reversed.

USDCAD drifted higher in a lively overnight session. It started in Asia.  A US warship sailed close to a Chinese artificial island and raised a noodle storm in Beijing.The Chinese Foreign Ministry said that “China will resolutely respond to any countries deliberate provocations” The effect on FX markets was a tad understated.  AUDUSD dipped, yen rose and then both pairs returned to pre-news levels quickly.

In Europe, EURUSD traded in a narrow range while modestly softer than forecast UK GDP data (Actual 0.5% vs. forecast 0.6%, q/q) caused GBPUSD to slip.

USDCAD technical outlook

The intraday technicals are bullish while trading above 1.3120.This morning’s break of resistance in the 1.3190-1.3210 zone should extend gains to the 1.3240-1.3280 area. A break of 1.3280 targets 1.3455.  A move below 1.3120 would lead to a test of 1.3050. For today, USDCAD support is at 1.3150 and 1.3120.  Resistance is at 1.3250 and 1.3280.

Today’s forecast range is 1.3180-1.3260