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December 8, 2020
USDCAD open (6:00 am ET) 1.2789-93, Overnight Range 1.2770-1.2807
- GBPUSD rebounds on possible Brexit progress
- UD COVID-19 Relief talks sputtering
- US dollar on defensive, Wall Street mildly negative
FX Ranges at a Glance:
Source: IFXA Ltd/RP
FX Recap and Outlook: The global equity rally paused. The major Asia indexes closed with small losses except for Australia’s ASX 200 index which had a tiny gain. European bourses are down, and US equity futures are in the red. Oil prices are steady but a tad softer than their closing levels while gold prices are flat. There is no relief from the seemingly never-ending US COVID-19 relief stimulus negotiations.
GBPUSD is volatile. Prices dropped to 1.3291 after opening at 1.3353 in NY today, then roared higher, reaching 1.3393 on Brexit news. An EU spokesperson said that Britain agreed to remove the contentious clauses in the Internal Markets Bill, which many pundits said was always Boris’s plan. Prices retreated to 1.3365 as the major stumbling blocks about governance, fishing and level playing field remain. Boris Johnson did not sound all that optimistic about securing a trade deal with the EU, saying “I am hopeful, but I have to be honest with you. This situation is tricky.” He is reportedly meeting with EU Commission President Ursula von der Leyden in Brussels today.
EURUSD bounced in a 1.3096-1.3133 band and is trading just above the low in NY. Traders did not get excited about the jump in German ZEW Investor confidence to 55.0 from 39.0, perhaps because the Current Conditions indicator was worse than forecast. (Actual -66.5 vs forecast -66.0). Eurozone GDP was 12.5% Q/Q. German Chancellor Angela Merkle is contemplating closing retail outlets from December 27 to January 3, as another anti-COVID measure. The short-term EURUSD technicals are bullish above 1.3040
USDJPY didn’t blink even after the government unveiled a $700 billion stimulus package, mainly because it had been widely telegraphed. Prices traded in a narrow 103.97-104.13 range.
AUDUSD and NZDUSD chopped about in well-defined ranges. AUDUSD traders didn’t show any concern about the latest hostile China trade move.
Beijing suspended imports from a major Beef supplier because the Australian government passed a law giving them the authority to cancel any China Road and Belt contract. Road and Belt is China’s global infrastructure investment plan.
The US and Canadian economic calendars are empty.
USDCAD continued to consolidate recent gains in a rather dull overnight session. Everything is coming up “Loonie” for USDCAD bears. The popular 2021 consensus is for vaccine-fueled global economic boom. That outlook combined with zero or near-zero interest rates are driving commodity prices, and the other so-called “risk-assets higher. USDCAD is along for the ride. Domestic issues are not a concern.
USDCAD Technicals: The intraday USDCAD technicals are bearish below 1.2840, looking for a move below 1.2770 to extend losses top 1.2660, then 1.2500. A break above 1.2840 targets 1.2970. The March downtrend is intact below 1.3180. For today, USDCAD support is at 1.2770 and 1.2740. Resistance is at 1.2820 and 1.2860. Today’s Range 1.2780-1.2860
Chart: USDCAD 4 hour
Source: Saxo Bank
FX open (6:00 am EDT) High, Low, and previous close
Source: Saxo Bank
