USDCAD is under performing. The mix of soft oil prices, a lack of key domestic data releases, and divergent Fed and Bank of Canada interest rate policy has given the US dollar a bid.
It was a nervous but subdued start to the week.
EURUSD continued to receive help from last week’s doveish Fed rate hike which managed to put a floor under the single currency at 1.0730 and led to resistance in the 1.0775 area being explored. German Producer Price Index data showed a gain of 3.1% vs. forecast of 2.9% but it didn’t have much of an impact. Members of a German Economic Panel have called for the ECB to phase out QE, which got a little more attention than usual following Mario Draghi’s musings on the subject at the last ECB meeting.
Sterling stayed firm supported by last week’s Bank of England policy meeting where one member dissented and wanted a rate increase at once.
Oil prices stayed under pressure after the March “wash-out” of bullish long oil positions. The downtrend in WTI following the break of support at $50.50/barrel is intact while prices are below $48.95 with a break of $47.10 suggesting further losses to $44.10. A move above $48.95 would target $50.50.
Asia markets were not overly impressed with the omission and kept the US dollar on the defensive, a carry-forward action from last week. The fact that Japan was closed for Vernal Equinox Day probably exaggerated the impact although FX ranges were fairly narrow.
NZDUSD climbed steadily rising from a low of 0.7014 to peak at 0.7071 in early European trading. Aussie followed Kiwi higher and both currency pairs declined slightly by the New York open.
The holiday in Japan left USDJPY adrift within a narrow 112.45-112.75 range and it opened, in New York, near the top
USDCAD Technical outlook:
The intraday USDCAD technicals are in a mild downtrend while prices are below 1.3380 which is also the top of the 1.3280-1.3380 trading band that has held price action since the FOMC meeting, last Wednesday. A break either side of the range will extend moves by 0.0050 points.
Today’s Range 1.3310-1.3390
USDCAD 4 hour
