May 27, 2019
USDCAD Open (6:00 am EDT) 1.3444-47 Overnight Range 1.3444-1.3451
FX markets were quiet to start the week. The UK and US are closed for holiday’s, which removes over 70% of the daily market liquidity, and nearly 100% of trading incentive for those who are at their desks.
Asia markets opened erratically following the results of the European Parliament elections. Far-right and Nationalist parties made inroads, but the 751 seat EU parliament is still dominated by the 506 seats claimed by Socialists, Liberals, Greens and Conservatives. EURUSD climbed from 1.1202 at the open to 1.1212 before retreating to 1.1192 at the open in Toronto. GBPUSD suffered a similar fate, rising to 1.2751 from 1.2712 before dropping to 1.2675 in Toronto.
USDJPY inched higher, rising from 109.29 to 109.57 before dipping to 109.46. President Trump met with Prime Minister Shinto Abe and among other things, talked about how Japan could reduce its trade surplus with the US. US Treasury yields are off their lows however the 10-year yield, at 2.324% is still soft.
AUDUSD and NZDUSD traded in tight ranges.
There aren’t any new developments around the US/China trade talks. President Trump is still suggesting a deal is possible, while Chinese authorities are complaining about America’s tactics.
Oil prices slid. WTI oil dropped from $59.01/Barrel to $58.16/b as traders fear that a global growth slowdown is worse for prices than whatever support Opec can offer to underpin prices.
USDCAD opened unchanged from Friday’s close and traded in a tight band. The drop in oil prices has limited losses while traders await the Bank of Canada policy decision on Wednesday.
There aren’t any US or Canadian economic reports on tap today.
The intraday USDCAD technicals turned bullish with the break above 1.3440 and are now targeting a retest of 1.3505 and then 1.3520. Nevertheless, the 1.3370-1.3520 range continues to dominate price action although the longer term uptrend is intact while prices are above 1.3300. For today, USDCAD support is at 1.3430 and 1.3405. Resistance is at 1.3470 and 1.3490 Today’s Range 1.3430-90
Chart: USDCAD Hourly