Overnight Range 1.3415-1.3518

USDCAD took flight following a flurry of mixed economic data releases from the US and Canada even though the picture that was painted was blotchy and blurred.

USDCAD was already bid when the combination of better than expected US third quarter GDP (Actual 3.5% vs forecast 3.3%, y/y) and weaker than expected Canadian November CPI data (Actual -0.4% vs forecast 0.2%, Actual Core -0.4% vs previous 0.2% q/q) pushed the currency pair to 1.3518

Enthusiasm for the robust US GDP report was enhanced when US Durable Goods Orders-ex-transportation beat expectations and rose 0.5% in November.

A healthy Canadian Retail Sales report was ignored. October Retail Sales rose 1.1%, ex-Autos 1.4%.

Thin markets and negative Canadian dollar sentiment have underpinned the USDCAD rally.

Overnight, FX traders appear unwilling to go quietly into the night even as they got ready to hang their stockings on the mantle with care.  The FX majors were choppy but still inside recent trading bands.

New Zealand released better than expected third quarter GDP data (1.1% vs. forecast 0.9%) which gave NZDUSD and early session pop.  The rally was contained at 0.6925 and Kiwi bounced within a 0.6885-0.6925 band, opening in New York at 0.6900. AUDUSD followed NZDUSD higher initially but the prospect of rising US rates has led to additional unwinding of long Aussie positions.

USDJPY traded sideways within a narrow 117.40-75 band. Japan is closed on Friday (Emperors Birthday) but are one of the few Markets open on Monday

The European session was rather dull.  EURUSD edged higher into the holiday weekend likely due to position adjusting and profit taking.  Trading volumes were light.  Sterling was also a non-event.

The Canadian dollar was consistent overnight. USDCAD climbed steadily overnight, rising from 1.3395 to 1.3477 in early New York trading, undermined, in part, by a grind lower in WTI oil prices. A report that Libya was increasing production put downward pressure on oil prices.

USDCAD Technical outlook

The intraday USDCAD technicals are bullish while prices are above 1.3360.  This morning’s break above minor resistance at 1.3480 will extend gains to 1.3520 and shift the focus to major resistance in the 1.3570-90 area. For today, USDCAD support is at 1.3470 and 1.3420.  Resistance is at 1.3520, 1.3550 and 1.3590.

Today’s Range 1.3440-1.3540

Chart: USDCAD 4 hour