USDCAD Range 1.2957-1.3055
USDCAD traded higher in early Asia on news that USDCNY fixed 1.6% higher.The initial move proved wrong and USDCAD started to decline, accelerating on the break of 1.3105 and then the after-burners kicked in on the break of 1.3060. From there it was a straight shot down to just below 1.2960 before profit takers emerged to drive the currency pair above 1.3000 again.
Elsewhere, the US dollar retreated across the board against the G-10 currencies with CHF gaining 1.55%.There isn’t any clear reason for the moves. China maintains the devaluation was a one-off but it appears the rest of the world is a tad sceptical. More than likely, a lack of top tier data from the US and increased uncertainty around a September rate hike led to long US dollar positions getting cut.
USDCAD traders need to keep their eye on the ball, or more specifically, WTI prices. WTI is still in a downtrend and not far from the 2015 low. The International Energy Agency released a forecast stating that the oil oversupply will persist through 2016.
The intraday technicals are bearish while trading below 1.3030 with the break of support at 1.2960 opening the door for a deeper correction to 1.2800-50. A move back above 1.3030 would negate the downside pressure. For today, USDCAD support is at 1.2940, 1.2910 and 1.2880. Resistance is at 1.3010 and 1.3040.
Today’s Range 1.2960-1.3030
Chart: USDCAD hourly with intraday support