USDCAD Range 1.3015-1.3182
USDCAD sank following the FOMC decision but recouped all of its losses almost immediately in what in hindsight proved to be a bizarre move. USDCAD dropped from 1.3180 just prior to the news, touched 1.3077, immediately afterwards and then rebounded back to 1.3180 in a heartbeat. Asia traders took note of the doveish FOMC statement and sold dollars across the board, including USDCAD, a theme that continued throughout the European session. USDCAD sank even lower than the post FOMC low and currently sits at 1.3050.
USDCAD opened in New York with a negative bias and barely budged on the release of the as-expected Canadian CPI data.
The surprisingly doveish FOMC statement appears to have shifted the driver of US interest rates from American inflation and Labour reports to Chinese data and their economic outlook. Even though the door remains wide open for a rate increase in December, China developments could derail the process in a hurry.
The balance of the day should see a continued bias to sell US dollars although intraday profit taking could slow any losses. The Greece elections and weekend Fed speakers will set the tone to start next week’s action.
The intraday technicals are bearish USDCAD while trading below 1.3160 with a break below 1.3010 leading to 1.2960. There is additional support in the 1.2910-40 zone. A recovery above 1.3160 targets 1.3230 and suggests that the 1.2960-1.3350 trading band will remain intact. For today, USDCAD support is at 1.3010, 1.2980 and 1.2950. Resistance is at 1.3080, 1.3130 and 1.3180.
Today’s Range 1.3010-1.3080
Chart: USDCAD 30 minute