USDCAD Overnight Range 1.4435-1.4558
Oh what a relief it is! The Chinese data was as soft as expected and because it was expected, traders saw it as a “good thing” allowing global equities, oil and commodity currencies to rally. For the record, China Retail Sales were slightly worse than expected, rising 11.1% and 2015 GDP came in at 6.9%, exactly where President Xi Jinping told the statisticians it would be.
AUDUSD dropped immediately after the Chinese data but reversed course when equity markets rebounded. By the time New York traders got to their desks, global equity indices had all made hefty gains.
EURUSD remains trapped within the 1.0700-1.1000 range awaiting Thursdays’ ECB meeting. A slew of UK data plus the equity market bounced helped GBPUSD rebound.
Oil prices took advantage of the warm and fuzzy feeling emanating from the China data to stage and impressive rally. WTI jumped to $30.17/b from a $28.75/b low overnight. It is hard to see these gains sustained with Iran reportedly committed to boosting production by 500,000/b per day.
USDCAD dropped in line with the oil price rebound but support in the 1.4430-40 area held and it has since rallied back to 1.4480. Bloomberg says 16 out of 34 economists surveyed, expect the Bank of Canada to cut rates tomorrow. That suggests USDCAD will react violently on the announcement.
USDCAD technical outlook
The intraday USDCAD technicals are bearish while trading below 1.4510 supported by the break below support at 1.4485. They are targeting a steeper correction to test the uptrend line from January which resides at 1.4370. However, the uptrend line is being guarded by support in the 1.4400-10 area. For today, USDCAD support is at 1.4440 and 1.4410. Resistance is at 1.4490, 1.4520.
Forecasted Range 1.4440-1.4520
Chart USDCAD 1 hour