USDCAD Overnight Range 1.3012-1.3152  

This mornings Canadian Wholesale Sales data didn’t help the Canadian dollar. It was weaker-than -expected and supports the view that the Canadian economy is performing a tad more than just sluggish. Today’s US Jobless Claims were close enough to forecasts that they didn’t hurt (or improve) the odds for a June rate hike.

The US dollar rallied following the release of the FOMC minutes, yesterday afternoon and USDCAD is still making gains. USDCAD was hovering around 1.2900, pre-FOMC minutes and is now 1.3098. A dip in WTI oil prices in the same time period, from $48.75 to $47.11 and a substantial speculative short USDCAD positions fueled the moves.

The FOMC minutes were hawkish-far hawkish than anticipated as they made an explicit reference to a June rate hike.  The odds for a June rate hike have increased, but according to the CME FedWatch tool, the probability is only 34%.

In Asia, the Australian employment report came out in-line with consensus but the details were a tad softer.

In Europe, UK Retail Sales surprised to the upside and gave GBPUSD a lift.  EURUSD was content to consolidate its losses stemming from the FOMC minutes and stayed within a tiny 1.1200-30 range.

Canadian Retail Sales and CPI data due tomorrow could fuel the Loonies demise if they are below expectations.

USDCAD technical outlook

The intraday USDCAD technicals are bullish while trading above 1.3030 supported by the break of the downtrend line in the 1.2950-70 area. The overnight break of the 1.3050-60 zone which was major support on the way down, points to additional gains targeting 1.3160 and then 1.3310, the 38.2% Fibonacci retracement level of the 2016 range.

For today, USDCAD support is at 1.3110, 1.3060 and 1.3020.  Resistance is at 1.3160, 1.3240 and 1.3310

Today’s Range 1.3080-1.3160

Chart: USDCAD 4 hour