USDCAD   Overnight Range 1.2955-1.2997    

It’s a “Hot time, summer in the city” kind of day when rising humidity and a lack of data will give traders heat stroke and an excuse to visit sidewalk beer gardens.   USDCAD buyers heard the Siren’s call of 1.3000 and like the unlucky sailors of yore, found themselves wrecked upon the rocks, a scenario that played out twice overnight and is still playing out this morning. Today’s release of Canadian Wholesale Sales data missed forecasts (Actual -1.0% vs. Forecast 0.0%) but will encourage continued assaults on the 1.3000 area.

Note: Big “round numbers” such as 1.3000 usually generate a lot of resistance in part due to the proximity of option barriers which tend to lurk just above these levels. The current price action is evidence of a “barrier” defence.

FX markets in Asia started the week without Japanese traders who were off celebrating Marine Day.  Fortunately, the New Zealand Prime Minister (and ex-FX trader) John Key, commented that he was surprised with the speed of the Key-wi’s fall sparking a short squeeze.

There won’t be a lot of anything fresh to trade from today, leaving markets to rehash the current themes of rising US rates and weak commodity prices.

Technical Outlook

The intraday USDCAD technicals are bullish while trading above 1.2910 with minor support seen at 1.2950 and looking to extend gains to 1.3050.  There is a lot of resistance between 1.3000 and 1.3050 dating back to 2008-2009. A move below 1.2950 will meet strong support in the 1.2880-1.2910 area.  For today, USDCAD support is at 1.2950, 1.2920 and 1.2890.  Resistance is at 1.3005 (intraday high) and 1.3050.

Today’s Range 1.2960-1.3030

Chart: USDCAD 4 hour with uptrends