Winter is coming. That is the motto of Game of Thrones House Stark and it is also on the lips of New Yorkers and the eastern seaboard. A spring blizzard is expected to dump 18 inches of snow in central park tonight and tomorrow which will give traders added incentive to do nothing ahead of Wednesday’s FOMC meeting. That should ensure narrow range trading until then.
The US dollar was a little worse for wear in a wobbly overnight session dominated by position adjustment. Friday’s US employment data pretty much guaranteed a rate hike on Wednesday which was all traders need to hear to trim positions and book profits.
EURUSD erased all its Asia gains and opened in New York a little weaker than where it was at Friday’s close. Comments from ECB officials that “nothing has changed” on the monetary policy front and event risk from the Dutch elections encouraged EURUSD selling.
GBPUSD has traded choppily within a 1.2200-40 range in part because the UK government is expected to trigger Article 50 on Tuesday. Let the games begin!
AUDUSD and NZDUSD are consolidating gains from Friday with Aussie garnering a bit of support from firmer gold and copper prices.
Oil prices are trying to find a floor in the $47.80-$48.00 area. WTI remains heavy after Baker-Hughs reported another increase in drilling rigs.
USDCAD is struggling to extend losses following the better-than expected Canadian employment report and broad US dollar weakness on Friday. The currency pair has drifted within a narrow 1.3440-1.3474 range. The drop in oil prices and the prospect of higher USD interest rates has left the bottom of the uptrend channel intact.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish while trading below 1.3480 but need to break below 1.3430 to extend losses to 1.3390. A move below 1.3390 would target 1.3330 and then 1.3250. A break of 1.3480 would shift the focus to 1.3600. For today, USDCAD support is at 1.3430 and 1.3410. Resistance is at 1.3480 and 1.3510
Today’s Range 1.3430-1.3490
Chart: USDCAD 30 minutes