USDCAD Overnight Range 1.3044-1.3105    

USDCAD opened in New York with an offered tone while probing support in the 1.3040-50 area. The support held and dollar sellers became dollar buyers.  The buying became more urgent when WTI oil prices slipped from $48.20/barrel to $47.63 where they currently sit. The combination of a Wall Street Journal survey  that 64% of economists now expect the Fed to hike rates in December and yesterday’s doveish Draghi speech have reignited downside pressure on EURUSD. As it stands now, the US dollar has gained across the board against the G-10 currencies.

The overnight session was busy.  In Asia, Japanese traders returned from holiday and bought equities. The Nikkei rose 1.3% helped by three Japanese Post affiliates IPO’s. Slightly better-than-expected Australian data (Retail Sales, Trade) gave AUDUSD a lift.

In Europe, EURUSD traded heavily throughout the session as more traders become convinced that the ECB will add stimulus in December.  GBPUSD ignored decent data as traders waited for Thursday’s Bank of England MPR, minutes and statement.

This morning’s US ADP employment data was slightly better than expected and therefore didn’t harm the December rate hike expectations and neither did the US trade deficit, which narrowed.  The Canadian trade deficit also narrowed but was ignored as traders focused on oil price movements.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.3140 but need to break support in the 1.3040-50 area to extend losses to 1.2990-1.3010. A break above 1.3140 negates the downtrend and reactivates the 1.2940-1.3280 range that has been in place since October 27. For today, USD support is at 1.3040 and 1.3010 Resistance is at 1.3140 and 1.3170.

Forecast Range for the day 1.3080-1.3140

Chart USDCAD 1 hour with Fibonacci