USDCAD Overnight Range 1.3068-1.3173  

The US dollar sank against the G-7 currencies overnight as Asia extended the post-payrolls, US dollar selling which continued to a lesser degree in Europe. However, the sentiment changed when New York traders walked in and started buying US dollars.  What changed?  Nothing. Evidently the traders concluded that the dollar selling was overdone, especially due to its proximity to many key support/resistance levels. In fact, many analysts have noted that US dollar losses following a disappointing payrolls report usually get reversed the following week.

The Canadian dollar rally halted well above key support in the 1.2950-1.3000 area. Today’s WTI rally may just be noise within the context of September’s $43.00-$49.00/barrel range considering that overproduction issues are still a going concern. In addition, the Canadian election result could be problematic.  The PC’s may win the most seats but not enough to form a government.  The Liberals and NDP are mostly interchangeable ideologies who could easily band together which may be good for Trudeau and Mulcair but not for the Canadian dollar.

Looking ahead, there isn’t much in the way of US data to get excited about this week until Thursday afternoon’s release of the FOMC minutes.  They will be closely scrutinized to assess the degree of hawkish/doveish sentiment on the Committee.  That leaves regional influences to create the excitement. Tonight’s RBA interest rate decision and statement could lead to Canada weakness on AUDCAD demand if the statement is not as doveish as expected.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.3150 supported by the move below 1.3120 which has led to a test of 1.3067. A break below 1.3060 will target support in the 1.2990-1.3010 area and then 1.2950. A move above 1.3120 will lead back to 1.3150.

Today’s Range 1.3080-1.3150

Chart USDCAD 30 minute