Friday Close to Tuesday Open Range 1.3072-1.3162
The US dollar is feeling frisky to start a holiday-shortened week, managing to post gains across the board against the majors.
Holidays in Canada and the US put a damper on trading in Asia and Europe on Monday. The greenback eased slightly within narrow ranges. Against the G10 currencies. EURUSD inched up on a tick higher in the German PPI index while GBPUSD gained on better UK data.
That wasn’t the case on Tuesday. Traders wanted to buy dollars and that is what they did.
USDJPY opened in Asia at 113.07 and climbed to 113.70 before Europe opened. Philadelphia Fed President Patrick Harker repeated his March rate hike comments in a Friday interview and for some reason, Asia traders reacted.
The Reserve Bank of Australia (RBA) released the minutes from their February 7 meeting. The minutes didn’t provide traders with anything different from what was in the statement. Broad US dollar strength undermined NZDUSD.
EURUSD was on a one-way move lower from the open in Asia, falling from 1.0614 to 1.0534 when New York opened. Better than expected Feb. preliminary Eurozone Manufacturing PMI data was ignored. (Actual 55.5 vs. forecast 55.0) The combination of French election concerns, renewed Greece debt issues and US rate hike chatter drove the single currency lower.
Sterling retraced all of Monday’s gains, dropping from 1.2479 to 1.2405 on negative Brexit talk. The UK Guardian reported that a “no-deal” Brexit would add £6.0 billion in extra cost to UK exporters.
Oil prices appear to be defying gravity. Speculative traders are holding a record number of long oil contracts empowered by Opec production cut agreements, which is supporting the price. The obviously believe that future crude demand will more than offset the glut of crude inventory in the US. Still, it is important to remember, that despite the recent gains, WTI remains inside its $540.50-$55.14 trading range that has contained moves since mid-December.
USDCAD broke above intraday resistance at 1.3120 and rallied to 1.3162 by mid-morning in Europe. Profit taking and the rise in WTI pushed USDCAD back to 1.3132 as New York opened.
It is another light day for data in the US and there is no data on tap from Canada. Traders will look to Minneapolis Fed President Noel Kashkari’s remarks to see if he is on the same page as his colleague from Philadelphia, Patrick Harker. The wait for Wednesday’s release of the FOMC minutes could put a damper on trading, although last week’s comments by Fed Chair Yellen may have usurped their importance.
Overnight Ranges
|
6:00: AM Open |
|||
|
21-Feb-17 |
High |
Low |
|
| USDCAD |
1.3153 |
1.3162 |
1.3101 |
| EURUSD |
1.0537 |
1.0614 |
1.0534 |
| USDJPY |
113.69 |
113.76 |
113.09 |
| GBPUSD |
1.2414 |
1.2479 |
1.2412 |
| USDCHF |
1.0095 |
1.0098 |
1.0027 |
| AUDUSD |
0.7663 |
0.7688 |
0.7650 |
|
NZDUSD |
0.7137 | 0.7186 |
0.7132 |
| USDMXN |
20.3935 |
20.4608 |
20.3638 |
|
WTI |
54.32 | 54.32 |
53.61 |
| Close 4:00 pm EDT-Open 6:00 am EDT | |||
USDCAD Technical outlook:
The USDCAD technicals have flipped from bearish to bullish following the break above 1.3110 which represented the downtrend line that had been intact since December 28, 2016. A break above resistance in the 1.3210 zone would target additional gains to 1.3360 and confirm a short-term bottom is in place at 1.3000. A move below 1.3110 would lead back to 1.3060. For today, USDCAD support is at 1.3110 and 1.3080. Resistance is at 1.3160 and 1.3210
Today’s Range 1.3120-1.3180
Chart: USDCAD 4 hour
Source: Saxo Bank
MEXICO
USDMXN moved higher on Monday but the move stalled out at 20.5380 and it retraced all the gains, dropping back to 20.3485. USDMXN is tracking general US dollar sentiment and is in a minor uptrend while prices are above 20.3650 with a move above the overnight high extending gains to 20.6410
Chart: USDMXN 1 hour
Source: Saxo Bank
